How Financial Wellness Programs Help Alleviate Employee Financial Worries
Financial health and stability concerns are at an all time high for Americans in the current COVID-19 pandemic environment. In a survey by Travis Credit Union, 73% of workers believe that the pandemic will significantly impact their financial choices and habits. 45% said that they would curb their spending and manage their money better, while 43% plan to contribute more to their savings. Many unemployment records have been broken, and approximately three in ten Americans had to withdraw money from their retirement savings just to get by.
For those lucky enough to hold on to their jobs or those who have found work after being laid off, building a healthy financial foundation is key. Most financial advisors have stressed for years the importance of keeping between three to six months of expenses set aside for emergencies. However, most Americans still live paycheck to paycheck even before the pandemic. For millions of Americans, the financial uncertainty faced during COVID-19 times might force them to build healthy financial habits―often for the first time.
Financial Wellness Programs a Strategic Imperative for Employers
Financial worries plague the majority of Americans today, but what role should employers play in this mix?
Having financially healthy employees is a strategic imperative for employers. A recent IDC report found that employees working at companies with robust employee experience programs―of which well-being and financial wellness is a core part―reported staying 6-10 years on average with the company, and are 35 times more likely to feel like part of one team driving business results. Financially stressed employees can impact employers negatively through productivity loss, turnover, absenteeism, and delayed retirement. Investing in the financial well-being of employees is a win-win for both employers and employees.
Enter employer sponsored financial wellness programs. Traditional efforts such as 401(k)s and group life insurance should be part of the solution, but they are not enough on their own. Investing in a 401(k) for retirement is important, but most employees cannot figure out on their own how to juggle saving for retirement with other financial goals, such as paying off debt or saving for a child’s education. Most employees need help determining how much of their paycheck should fund those goals versus how much should go to everyday expenses.
What employees need is a holistic program that helps them achieve financial success on their own terms at every stage of life. These financial wellness programs should include education to improve financial literacy, financial plans tailored to each employee’s needs, investing to reach long-term goals, and day-to-day management of their money. It should be in an easy-to-use format, such as a website or an app, for employees to get started on their journey towards financial wellness. The platform should also be paired with experienced human advisors so each employee can get personalized advice.
Holistic financial wellness programs that provide customized advice have traditionally only been available to high net worth individuals in the past. This has evolved in recent years to include broader solutions that address the needs of all employees through employer-sponsored programs.
A holistic financial wellness program helps your employees get to a solid financial foundation and alleviate their worries. Employees will be less stressed about their finances, ultimately driving value for your company. Employers that offer these programs are on track to reap the benefits of a more productive, loyal, and engaged workforce.