Financial Wellness Gaining Traction As Employee Benefit
Financial stress is becoming more of an issue in the workplace with 57 percent of employees telling a PricewaterhouseCoopers (PwC) survey that money concerns are the primary cause of stress in their lives. The same survey found that 74 percent seek guidance in making financial decisions.
The combination of monetary stress and the search for help by employees has led to financial wellness becoming one of the most requested employee benefits.
“There are so many people that are stressed out, not prepared for anything major to happen,” Chad Schneider, Head of Broker Partnerships at Origin, told a recent meeting of benefits providers. “They make decisions in a vacuum, don’t know what to do for financial advice.”
Opening Up
Coupled with the trend toward financial wellness programs at work is an increasing openness about money problems, according to PwC.
About a third of survey respondents this year told PwC they were embarrassed to ask for financial guidance. In 2019 that figure was 41 percent.
Consequently, the use of financial wellness tools has grown.
PwC launched their survey in 2012. That year 51 percent of employees with access to financial wellness benefits had used them. However, this year, 68 percent use such services.
What Are Financial Wellness Benefits
Any assistance that can help employees control or better their financial lives qualifies as a financial benefit. Most companies offer retirement plans and various insurances, such as life, health, and disability. In addition, some companies contribute to education and training costs. However, financial wellness can include less conventional resources. Those may include:
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Financial Education and Coaching
In addition to paying salaries, more and more companies are offering savings plans for retirement and more. However, counseling on how to manage those funds has not been available. That is where a financial wellness program comes in.
This benefit improves employees’ financial knowledge and offers counseling to help with everything from retirement planning to budget and credit management.
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Emergency Fund Access
The annual Bankrate emergency savings report says only 48 percent of American adults have enough money socked away to cover three months of expenses. To help, some employers incorporate an inhouse emergency savings account. These accounts are typically funded through payroll deductions.
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Student Loan Assistance
Another financial wellness benefit resurfaced in July. That is when the supreme court struck down President Biden’s student loan forgiveness plan. Employer assistance can include a savings program similar to the one for building an emergency fund. In addition, companies offering a discretionary fund can allow employees to use some of that money for student loan payments.
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Personal Financial Assistance
One of the greatest costs for working families is childcare. Some financial wellness plans offer partial day care payments and contribute to 529 education plans. In addition, some companies reimburse employees for commuting and other work related expenses.
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Flexible Paydays
Over 60 percent of American consumers live paycheck to paycheck, according to research by LendingClub Corporation.
Flexible pay allows you to tap into your paycheck before payday. That makes it easier to pay bills on time. As a result, you avoid late fees and damage to your credit record.
Benefits For Employers
Employees are not the only ones benefiting from financial wellness programs. Multiple studies indicate that a workforce free of money worries is more productive.
The PwC survey revealed that financial stress hinders employee productivity. One in three workers say financial concerns have hampered their job performance. Among workers hampered by money worries, 56 percent admit to spending three or more hours a week on the job thinking about their finances.
In addition, 54 percent of financially stressed employees feel they do not have a promising future with their company. Conversely, 69 percent of financially secure employees see a bright future.
That mirrors a MetLife report that found that 84 percent of employees without money worries were happy. In addition, 78 percent said they were more engaged with their work. That compares to 55 percent and 53 percent for financially stressed workers.
Hiring Tool
In addition to improving productivity, offering a financial wellness program can be a recruitment and retention tool for employers.
Last year, Bank of America reported that 81 percent of surveyed employers find a financial wellness program can attract higher quality talent. In addition, 84 percent of those companies say such programs help retain workers.
Conclusion
A financial wellness program offers benefits to employers as well as employees. In addition, the investment in employee payroll contributions to fund some benefits can be automated. As a result, those costs are minimal.
Perhaps the greatest expense in a financial wellness program is paying for counselors or coaches. Some organizations may not be able to afford that cost.
Some investment firms will be happy to provide counseling for free. However,those advisors earn their living from sales commissions associated with investments or insurance. As a result, their objectivity may be compromised.
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