The Business Roundtable recently shook up the corporate world with its new “Statement on the Purpose of a Corporation.” The document, signed by 181 CEOs from leading companies, responded to growing concerns that capitalism is working for those with wealth, while leaving others behind.
In what was a major policy change, the Business Roundtable said companies should be concerned not just about shareholders, but also about customers, employees, suppliers and communities. The statement ended with a commitment to deliver value to all stakeholders.
One way corporations can demonstrate their support for the Business Roundtable’s call to action is by helping employees achieve financial wellness — one of the most critical areas of a person’s life and a challenge insufficiently addressed in Corporate America. In my previous role overseeing 10,000 people at a multinational tech company, I became acutely aware of how financial stress impacts employees across all ages, genders and income levels. In fact, advancing the financial well-being of employees is why I started my company.
Financial wellness is a universal need, like quality healthcare and education. Yet, financial well-being has become more challenging for many Americans due to rising housing costs, student loan and credit card debt, and the lack of financial knowledge.
It’s important to understand just how stressed out employees have become. Their anxiety affects your company and their quality of life. A study by PwC demonstrate why financial wellness should be a corporate priority:
In the 21st century, employers are well positioned to help workers achieve financial wellness. They already play a major role in the physical and mental health of their employees through their health insurance programs. Financial wellness as an employee benefit is an extension of that contract with workers. As important, employers have the infrastructure in place to deliver financial wellness programs.
For employers, the key is delivering a program that addresses every aspect of personal financial management: planning, budgeting, investing, debt management, estate planning and insurance. Ongoing education is also important to help employees manage life changes and changing economic conditions.
From a strategic perspective, financial wellness programs can be a good investment. For employers, financial wellness programs can help lower operational costs. My company recently worked with a business on its program and estimated $624,000 in cost savings from reduced employee turnover, healthcare and retirement costs. In terms of the top line, financial wellness enhances productivity by deepening employee engagement.
For employees, financial wellness is a stress reliever. And such programs can improve how employees feel about their finances.
A company’s commitment to an employee’s financial well-being is a powerful motivator, in my experience. And, in today’s tight labor market, a comprehensive financial wellness program can be a competitive differentiator in hiring talent and powering your growth strategy.
I’ve often seen employees leave a company for a $10,000 salary increase, but forgo tens of thousands or even hundreds of thousands of dollars in stock options and restricted stock units. Financial wellness helps employees understand the full value of your employee benefits.
So how do C-suite executives know what to include in their programs or how to select from among the growing number of vendor options? What are the most important elements in a financial wellness program? Whether you’re creating your own program or seeking one from a provider, here are five key elements of an employer-sponsored financial wellness benefit:
For corporate leaders, now is an opportune time to champion financial wellness and build it into your 2020 budget. Doing so will not only advance the Business Roundtable’s call to action; it will benefit your company and your employees.
This article was originally published in Forbes on October 23, 2019.