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Every business across every industry would prefer to hire and staff productive and efficient workers as opposed to distracted and apathetic employees. Engaged employees are more satisfied with their jobs, get more done during the workday, and are less likely to be looking for a new job at a different company — yet polling from Gallup shows that only about one-third of employees (32%) are actively engaged at work, and 18% are actively disengaged.
One way that organizations have been attempting to connect with employees and foster greater engagement and company loyalty is through specialized benefits programs that help workers feel supported and valued by their employers. Financial wellness programs have become an increasingly important way to do this: 77% of workers say that financial wellness benefits are important to them, according to the Transamerica Institute.
Despite the fact that financial health programs are popular among workers, employers are not widely offering them. The same Transamerica Institute research found that just 28% of employers provide some kind of financial wellness benefit. This is at least in part due to the challenge of considering workplace ethics when finding and implementing a financial wellness benefit — but with the appropriate education and approach, employers can add these offerings to their benefits package.
Launching any new benefits program requires examining and weighing the ethics involved, whether it’s a health-related offering or increased support around personal finance. When considering the ethics of a new benefit, the National Library of Medicine suggests analyzing the following ethical principles related to employees:
These ethical principles can sometimes conflict with one another, as well as with the employer’s ethical duty to the organization. Executives and business leaders should adhere to the following ethical principles:
When making decisions about which financial wellness programs to offer, business leaders should consider the autonomy, confidentiality, and privacy of their workers, as well as their own ethical duty to both beneficence and responsibility. This means they will need to weigh the financial implications for the company as well as for the individual employees. For example, a financial wellness program that is beneficent might not also be fiscally responsible, depending on how much it costs the business.
There are many ways that employers can maximize many or even all of the ethical principles they must uphold both toward employees and toward the organization. Helping employees achieve their financial goals, mitigate economic stress they might be experiencing, and providing incentives to help them save more money faster can all work in tandem with a financial wellness program such as a workplace emergency savings account (ESA).
Employers should consider whether they can responsibly supplement a workplace ESA with incentives such as sign-up bonuses, matching a portion of employee deposits, or milestone bonuses offered when employees reach certain savings goals.
To ensure that employee autonomy is respected, employers should prioritize measures that promote both transparency and informed consent. For example, federal and state regulations might allow employers to automatically enroll employees in various financial benefits or wellness programs (such as a retirement plan or a workplace ESA). Enrolling employees automatically in these programs is ethical — as long as the employees are fully informed of their enrollment.
Similarly, if the financial product or service offered to the employee includes any fees, risks, or potential conflicts of interest, these should be clearly and transparently outlined so that they are easy to understand and interpret, and that information should be shared with employees as early as possible — ideally before enrollment is fully confirmed.
Every employee has a right to privacy and confidentiality, and this is especially important when it comes to personal finance information and data. An employee’s salary, retirement savings contributions, workplace ESA balance and contributions, and their routing and bank account numbers are all examples of data that an employer might be able to access and that organizations must protect on behalf of their employees.
Employers should do everything in their power to ensure they are offering the highest standards in data security and encryption around their workers’ financial information and benefits. That said, there are ethical reasons why employers might want to access more granular financial details about employees — for example, examining savings account balances to assess who might benefit from a specific type of financial coaching or education offering. Employers should also anonymize data whenever possible, ensuring that detailed financial information cannot be linked back to specific employees.
The key is understanding how to balance valuable financial perks that are customized for each employee against that same employee’s desire for and expectation of privacy. This is another reason why transparency and informed consent are so important: Explaining the reasoning behind accessing personal financial information, how it will support the employee’s financial goals, and how the company plans to keep that information safe can then allow individuals to make informed decisions about what to disclose.
Creating a full benefits package that is equitable, fair, and non-discriminatory while also tailoring it to meet diverse individual needs can be a challenge. According to the CFPB, 60% of people with disabilities have no emergency savings, and Bankrate found that women are saving less for emergencies than men. Beyond demographic differences between employees, there may be large discrepancies between the financial wellness and needs of part-time and full-time employees, low-income and executive workers, and whether all of these staff members are well-versed in financial planning or novices to the topic.
Surveys show that different employees have a wide range of financial priorities, from paying off debt (whether that’s credit card debt, a mortgage, or a student loan), saving for retirement, building emergency savings, covering their basic living expenses, building a financial legacy, supporting parents or grandchildren, and more. An ethical financial wellness program will be flexible and individualized enough to support and accommodate all of these different priorities.
If possible, employers should try to offer access to financial wellness benefits to everyone in the workforce. Even if it’s not possible to offer retirement savings plans to part-time employees, providing a different option (such as a workplace ESA) that is available across the workforce can be one way to build an ethically sound financial benefits package. Providing free financial coaching or financial literacy training to all staff members is another powerful way that employers can craft an equitable benefits program.
In one case study, a company offering financial benefits around housing debt and credit card management used advanced analytics and personalized financial assessment tools to build customized plans for individual employees. The company offering these benefits also provided workshops and seminars that catered to different employee priorities, such as saving up for a down payment on a house or improving a credit score.
The ultimate goal of any workplace financial wellness program should be to improve the overall financial health of every employee. Employees who feel that they are in control of their finances are more engaged and productive at work, have higher job satisfaction, are more likely to stay with their current company, are better prepared for retirement, and are healthier, all of which can increase profitability and improve culture for the organization offering the benefit. It can be well worth the investment to build financial benefits that have the biggest ripple effects for employee financial health.
To create a financial wellness program that guides and supports employees at every life stage and that addresses every aspect of their financial health, it’s important to consider not just salary or base wages, and not just retirement savings accounts or health insurance, but also topics such as emergency savings, budgeting, student loans, credit scores, insurance, taxes, estate planning, and much more. Asking employees what their priorities are, where they would most like support, and then providing them with solutions is one of the best ways to build loyalty among current employees and attract the best new talent.
If an organization is mindful of the ethical considerations, then the chances of them creating an exploitative or coercive financial benefit is minimal. These programs should be easy for employees to understand, offer a simple registration process, and any money that the employee contributes should be made available to them if and when they need it. For example, a workplace ESA that has a prohibitive withdrawal process, making it difficult for employees to access the money they’ve saved when an emergency arises, is not aligned with ethical guidelines.
It’s the employer’s responsibility to thoroughly and fully explain how the program works, give employees the choice to opt out, keep their personal financial data safe, and make savings funds available to employees when they need it. Any incentives for signing up for the program should directly relate to the benefit being offered — for example, a sign-up bonus for opening a workplace ESA should get deposited into the savings account as opposed to offered as a cash reward.
There are both tangential and investment return (or ROI) benefits for employers who build and deploy financial wellness benefits for their workforce, but the ultimate focus should be on how the program affects employees. By ensuring that these benefits are transparent, equitable, accessible, private, and supportive of long-term financial health, employers can ensure that their benefits align with ethical business practices and show an enduring commitment to the welfare of the people who keep their company running — their employees.