If you search on Google, there are many definitions of financial wellness. One that cap-tures it at the core is “a state of financial well-being in which you can manage your bills and expenses, pay your debts, weather unexpected financial emergencies and plan for long-term financial goals, such as building college funds and saving for retirement.”
As employees face mounting financial challenges, organizations have a unique opportuni-ty to support their workforce by implementing effective employee financial wellness pro-grams.
From purely a bottom-line perspective, implementing an employee financial wellness programs can make good business sense. That’s because financially stressed employees tend to be more distracted, less engaged and more likely to seek another job.
According to PwC’s 2023 Employee Financial Wellness Survey, one in three full-time employees says that money worries have negatively impacted their productivity at work.
In addition, financially stressed employees are nearly five times as likely to admit personal finance issues have been a distraction at work
The survey also noted that distractions add up and can cost employers productivity. Among financially stressed employees who are distracted at work because of their finances, 56% spend three hours or more per week at work dealing with or thinking about issues related to their personal finances.
Financially stressed employees are also more likely to leave. Only 54% feel there is a promising future for them at their employer, compared to 69% of employees who are not stressed about their finances. They are also twice as likely to be looking for a new job (36% of financially stressed employees compared to only 18% of non-financially stressed employees). And 73% of financially stressed employees say they would be attracted to another employer that cares more about their financial well-being compared to just 54% of non-financially stressed employees.
Recent research from Talent LMS revealed that when implemented, employee financial wellness programs can contribute to organizational success by improving employee satisfaction, productivity, and overall well-being – including the ability to better cope with inflation and other economic stressors.
Elevating job satisfaction and retention. 83% of employees who received financial wellness training are satisfied with their job, compared to 63% who did not receive training.
Improving focus and productivity. Two-thirds of employees (67%) who received financial wellness training say it helped their productivity, while 8 in 10 said it helped them be more focused at work.
Combating stress. Financial wellness training is helpful in reducing stress to 71% of employees. This percentage is even higher for millennial employees (75%). Finally, 73% of employees say that the financial wellness training they get at work helps them feel more safe and secure.
Coping with inflation. It’s no secret that concerns about inflation have dominated the news headlines for the past few years. Over 6 in 10 employees (64%) getting financial wellness training say it is helpful for coping with rising inflation. Providing financial training courses can help them navigate an overheated economy and income squeeze — where employees say they feel the most pain.
While every company’s needs and objectives will vary, an effective employee financial wellness program typically includes the following key components:
Reduce inertia. Encourage employees to attend these programs during work hours or provide incentives for participation.
Offer personalized resources based on employee needs. For example, for young employees, focus on student loan management, credit building, and basic budgeting. For mid-career employees, provide information on retirement planning, home buying, and investment strategies. For near-retirement employees, address Social Security, Medicare, and estate planning.
Leverage local expertise for financial counseling services. Partner with financial advisors or credit unions to offer one-on-one counseling. Employees can discuss their specific financial situations and receive tailored advice.
Promote open communication. Create a culture where employees feel comfortable discussing financial concerns. Consider having managers share their own experiences and lessons learned.
Lead by example. Business owners, executives and managers should prioritize and show support for the company financial wellness program and set a positive tone for the entire organization.