This primer is intended to help business owners, executives and HR professionals understand how Finance Wellness Benefits can help your employees be more productive, less stressed,more loyal to your company all while improving your bottom line. As a leader of a business, do you ever feel like your employees’ parent, counselor or therapist? You are not alone and managing the resources your employees have is really important to help them be more productive while at work. Let's face it, employees sometimes bring their outside work stress and problems to work with them. There are many statistics that show this, but you probably live the dream every day. In a recent study, (PWC, Financial Stress and Bottom Line, 2018) employees who are stressed with finances are more likely to be distracted and spend three or more hours per week at work dealing with financial matters. If you do the math, 3 hours of work per week, per employee at the average wage, it can get costly.
One solution to help improve this situation and increase productivity is by having a Financial Wellness Benefit that employees can have access to. The traditional way or norm of providing these tools has evolved and there are few companies that can execute a program efficiently and within a reasonable budget. The program has to be designed in such a way that it can identify the financial challenges that employees are facing across gender, age and family circumstances. The challenges that employees face are very unique to each one and at different points in their lives. Once the provider of the Financial Wellness Benefit has identified the financial concerns, a targeted campaign can then send relevant information versus generic and bias content. The content has to be relevant to them so that it can lead to greater effectiveness in terms of actionable steps (more on this later).
As an organization, the effectiveness of a well designed strategic benefit plan can help with better overall company performance and help with an above average effectiveness in talent recruitment and retention. The increase in performance can be significant as shown in the SHRM 2017 Strategic Benefits Survey, where company performance was at 58% versus 34%. Is there a correlation in increased performance with a strategic benefits design? Other studies show that employers who believed in providing financial wellness tools lead to 78% more satisfied employees, 70% more loyalty, 68% more engagement and 57% more productive employees (BofA Merill Lynch Workplace Benefits report, 2015). If your organization is considering implementing a program or already has one, it is worthwhile to determine some KPI’s that can be evaluated to determine the overall impact to both the company and the employees.
The areas of a well constructed Financial Wellness Benefits program can address many concerns that employees have. Financial concerns such as budgeting, saving more for major goals, paying off debt and student loans, managing healthcare expenses and preparing for retirement. How employees use this benefit is pretty unique in terms of when and what they may need financial guidance for. Some employees can feel pretty comfortable making their own financial decision, but would like some professional validation. Other employees might want very specific advice like buying a home or making saving and investing decisions. Actionable steps through guidance is critical to help employees be financially confident. This can only be achieved through personalized guidance with the help of a licensed financial advisor acting as a fiduciary versus reading an article or clicking on a calculator.
A company can achieve better productivity and help improve the circumstance of their talent with a well constructed financial wellness benefit. Financial wellness benefits are relatively new on the scene and have been more accessible to larger size employers. Through the use of technology, the process can be fairly simple to implement and with providing ongoing advisory services. This, in turn, will help financial wellness benefits be more available to smaller organizations that can see the value and implement an affordable program.