The COVID-19 pandemic has left companies — and their employees — in a prolonged state of uncertainty. HR professionals have been in crisis mode since 2020, working not only to transition employees to remote work, but to provide them with mental and physical health assistance while also coordinating with the C-suite to keep the firm running. Now that businesses are beginning to settle into a new normal, HR professionals will continue to play a pivotal role.
While a number of companies are seeking to recruit and retain competent staff, the pandemic has prompted many employees to reevaluate their expectations and prioritize employment that offers more than the standard health insurance and paid time off. To keep up with the competition, more companies are creating employee financial wellness initiatives to enhance their benefits packages and attract employees.
The reasoning behind such programs is that financial stress among employees came to the fore amid the pandemic. The issue took on increasing urgency with HR as finance-strapped employees battled to keep up with unanticipated costs and lost income. According to PwC’s 2021 Employee Financial Wellness Survey , 63% of employees said their financial stress had grown since the pandemic began. Nearly 75% of those who had not yet experienced higher financial stress indicated they would still rather work for an organization that prioritized their financial wellness versus their present employer. Not to mention, inflation is reaching a multi-decade high and gas prices are soaring, further exacerbating people’s financial worries.
Current economic conditions and fallout from the pandemic suggest employers are still under considerable strain, and it could affect the business, whether you like it or not. Financial stress costs companies an average of $1,900 per employee each year in lost productivity, as stated in The Bridge. This explains why a rising number of companies are offering financial wellness programs as a benefit to their employees.
So, what’s an “employee financial wellness program”?
Employee financial wellness initiatives help employees better manage their finances and tackle financial stress. As a result, they can improve employees’ overall financial well-being. Some programs concentrate exclusively on financial education, while others incorporate employer matching, financial help and other resources.
For example, employees may attend financial workshops on homeownership, retirement savings, budgeting and debt management. Employer matching programs may entail matching a designated percentage of 401(k) or student loan contributions made by workers. Other financial aid options include tuition help, medical bill negotiation and financial planning subsidies.
For your financial wellness program to succeed, you need to figure out what your employees need. Diverse workforces will require different plans due to varying financial situations.
How will it benefit your organization?
If you haven’t looked into implementing a financial wellness program for your employees, consider introducing it as a part of your employees’ benefits package. As a result, you could enjoy these advantages:
• The ability to improve workplace happiness, as workers develop more trust in their financial future.
• Higher productivity among employees who are no longer preoccupied with financial concerns.
• Increased employee retention, due to increased enjoyment from work that they believe helps fulfill their financial demands.
• The possibility that employees who are less concerned about their financial well-being have better health, leading to fewer medical concerns and lower health care expenses.
Financial wellness initiatives should be viewed as a desirable addition to your company’s overall pay package. Plans can be altered as per your company’s specific needs. Make an appointment with your financial adviser to customize a plan for your company.
How to help employees coping with financial hardship
According to a June 2021 SHRM/Morgan Stanley study, 74% of HR professionals indicated their company had not yet implemented any perks or programs to help employees manage financial stress. If your company is trying to figure out the best course of action, there is mounting evidence that assisting employees in reducing financial stress helps minimize absenteeism and attrition. Here are some things your company should think about, in addition to retirement programs and safety-net insurance:
• Offer educational benefits. According to the survey, education benefits, such as tuition reimbursement, 529 savings plan help and student debt repayment are considered a significant employer-sponsored financial wellness benefit by roughly 1 in 5 workers.
• Provide financial literacy workshops and other resources. Give employees the skills they need to make a budget, pay off long-term debt, save for milestones and start an emergency fund.
• Include financial options for staff who want to do things by themselves. There are various digital platforms that may be tailored to each employee’s needs. Using AI-powered tools, employees may examine their current balance sheet and build a path personalized to their age, job type, career ambitions and other factors.
• Don’t forget about the human factor. Experts believe having human financial assistance counselors available through live chat, teleconference or in-person meetings is critical to success. In fact, one-third of the PwC study respondents said they’d want to see unbiased human coaches added to their company’s financial wellness program.
Employer-sponsored financial wellness initiatives
Like every other component of well-being, financial wellness requires a comprehensive approach. As there is no one-size-fits-all solution to financial wellness, it’s a good idea to provide alternatives. Businesses can provide a variety of financial wellness benefit plans to their employees, such as:
• Retirement savings plans:
This should go without saying. It is important to give your employees the tools they need to save for retirement. Consider how your company may optimize impact in addition to providing retirement alternatives. This might entail setting up a 401(k) business match.
• Insurance for life and disability:
These are safety net programs. While we hope that these programs are rarely utilized, life and disability insurance can be essential in certain situations.
• Employee-to-financial-adviser programs:
Such programs could cover wealth management, investments and estate planning.
• Financial coaching programs:
Employees could benefit significantly from working with a coach on a one-on-one basis. Consider developing personal finance, budgeting, savings, debt and other coaching programs.
• Emergency savings accounts:
Some businesses provide emergency savings funds to assist in times of need. For example, if employees are displaced from their homes due to a natural disaster, an emergency fund might help alleviate financial stress.
• Fertility and family planning programs:
Fertility and family planning programs are extremely expensive. Companies can decrease related stress by providing a fertility and family planning program, and by securing health insurance that covers fertility benefits.
