A recent survey reported that 80% of respondents had at least some level of financial stress; 27% reported high or overwhelming stress. A second survey found that 72% of Americans live from paycheck to paycheck, which means they sometimes have difficulty paying their basic expenses. Surprisingly, a recent survey found that nearly half (49%) of baby boomers are among those living paycheck to paycheck. In other words, most people are anxious about their financial well-being.
The high level of stress this causes affects productivity. In fact, it has been reported that employees who are financially stressed spend at least three working hours per week — or 19.5 workdays annually — worrying about their finances.
As distressing as these reports are, they provide an opportunity for employers. Workplace financial wellness programs can help ease employees’ concerns.
A wide range
Financial wellness programs can cover activities which might range from teaching the basics of financial literacy, showing how to manage debt and describing how to save for the future to providing savings plans such as 401(k)s and allowing employees paid time off or hybrid work arrangements so they can manage life activities (such as child care) without worrying they will lose their jobs.
There are three major considerations when it comes to designing financial wellness programs:
- There is no one-size-fits-all program. Variables such as location, cultural background and socioeconomic status all influence which program is best for the company. Before initiating any program, the company needs to know where their employees stand, which means using metrics such as EAP participation rate, retirement loan rate and absenteeism rate.
- Different generations in the workplace have different attitudes toward financial wellness and what they need to attain it.
- Different employees or groups of employees need different things. For example, offering a flexible schedule to accommodate child care helps only one type of employee; other workers may need support for eldercare and pet care. Student loan repayment programs and tuition programs are meaningful to some employees while others value seminars on how to pick a retirement plan or how to understand an HSA. Whichever financial wellness programs the company offers should be well thought out and include the needs of the various demographic groups in the workplace.
As with other company initiatives, the success of the company’s financial wellness programs needs to be tied to measurable goals, which the company should set ahead of time. Examples of such goals include a decrease in absenteeism as measured over time or an increase in the number of employees who engage with promotional materials or sign up for a lunch-and-learn session.
Financial wellness programs are offered by only 28% of companies, even though their benefit is substantial. They present a significant opportunity for companies seeking to increase employee engagement and retention.
