How Can Employers Help Improve Employee Financial Wellness?

Jun 05, 2018
| Anissa Kurtz
Employee Financial Wellness

Over the last few years there has been greater awareness in the workplace around employee wellness efforts and programs.

Many employers have put resources in place to help employees improve their physical and mental wellbeing. However, another area of wellness that is starting to become more prominent – and has significant impacts on physical and mental health – is financial wellness.

Financial wellness is a growing concern for employees and employers alike, especially as the cost of living continues to increase. Personal finance issues can impact an employee’s productivity and performance, while also creating other wellbeing problems.

But employers are now starting to take action to help their employees improve financial wellness.

SHRM’s 2017 Employee Benefits survey found that 49% of employers offered some type of financial advice – such as resource materials, online assessments and advice tools, group instruction, and one-on-one advice with a financial counselor. That’s up from 36% in 2016.

Let’s explore a few ways employers can improve the financial wellness of their workforce through benefits and other resources.
 

1) Create an Employer-Sponsored Financial Wellness Program

One resource that employers are adopting to address this important issue are financial wellness programs.

Sometimes included in a company’s Employee Assistance Program (EAP), financial wellness programs include various resources, tools, and materials that can help employees with their personal finances – both in the short and long-term.

Some common resources and tools that can make up a financial wellness program include:
 
  • Seminars, courses, and workshops
  • Access to financial counselors, planners, and experts
  • Assistance with savings and retirement planning
  • Learning and educational materials
  • Personalized support for all employees

Creating a financial wellness program, or including it in an existing EAP, can help employees handle their finances and reduce stress.

Additionally, these programs can help improve physical, mental, and emotional health that can be negatively impacted by financial problems. Financial wellness programs can greatly assist with improving overall employee wellbeing.
 

2) Enhance your Voluntary Employee Benefit Offerings

Voluntary benefits are becoming a vital component of a company’s overall employee benefits package.

With new trends emerging each year, employers have to routinely evaluate and improve the voluntary benefits offered to employees. Some of these benefits can directly address financial wellness and help to improve it.

Examples include:
 
  • Identity theft protection services
  • Legal assistance services
  • Additional and supplemental insurance offerings
  • Programs aimed at assisting with the expense of a college education (these programs are quickly growing in importance to employees, especially younger workers):

Not only can voluntary benefits help to improve the financial wellness of employees, but they can also be an extremely valuable recruiting and retention tool.
 

3) Improve Retirement Benefit Offerings and Resources

For employees of all ages, an important aspect of financial wellness is retirement planning. For most employees who are 10+ years away from retirement, their only source of income in retirement is in the form of an employer-sponsored 401(k) or other type of defined contribution program.

In addition, research shows that many employees are not saving in their employer-sponsored plan or not saving enough. Younger workers such as Millennials and Gen Z may not be focusing on their long-term retirement planning because they think they don’t need to since they aren’t close to retirement.

Employers need to take steps to emphasize the importance of and ensure that their employees are aware of and educated on why you should start saving for retirement now, their employer-sponsored program (if applicable), and how to participate (it’s also why employee communications are more important than ever).

Offering education and resources should be an ongoing program throughout the year, not only during the onboarding process. These resources should be offered periodically, especially if any changes take place to a company sponsored plan.

Additionally, providing an employer match for those employees who are participating in the plan is an effective way to help employees build up their retirement savings over time to help employees with their long-term financial wellness. Similar to voluntary benefits, not only does this improve financial wellbeing, but it is also an effective attraction and retention tool.
 

4) Foster a Company Culture that Prioritizes Learning and Development of Skills

An employee’s total compensation plays a critical role in their overall wellbeing. It is also a key, if not the most important factor in, an employee’s decision to leave their current employer in favor of a new opportunity.

Business leaders can help improve financial wellness and lower employee turnover by investing in the learning and development of their workforce.

As employees learn new skills and develop within their roles, they set themselves up for advancement opportunities and increases in salary.

This scenario is a positive for everyone involved:
 
  • Employers reduce turnover while developing and promoting talent from within the company
  • Employees increase their skill set and progress in their career with their current employer, all while gaining more compensation

Learning and development is growing in importance for employees, and is an integral component for recruiting new talent and reducing workforce turnover. With new technologies and the rise of on-demand learning, employers have more options available to offer to their workforce than ever before.

Don’t underestimate the value of learning and development in helping to improve financial wellness, especially over time.
 

Improving Financial Wellness is a Win-Win for Employers and Employees

Financial wellness is a significant issue for both employees and employers. Personal finance issues can negatively impact an employee’s mental and physical health, while decreasing their productivity in the workplace.

This is why employers should take actions that address and improve financial wellness.

Considering both long-term benefits (such as retirement plans) and short-term programs (such as access to financial experts) can help to build a robust and comprehensive financial wellness program.

What’s the difference between co-employment and employee leasing? Check out our eBook, Co-Employment vs. Employee Leasing: The Differences Brokers (and Clients) Should Know, to learn more about how different they really are!

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