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How financial health and wellness programs help businesses and their employees
Key takeaways:
Financial wellness has become a buzz phrase in the human resources world. More employees than ever before are asking for financial health and wellness programs from their employers and these programs don't just benefit employees.
Establishing financial wellness programs can benefit both employees and employers. What is financial wellness? Why is it important to your employees? How can it benefit your organization as a whole?
This guide looks at all those questions and explains why you should implement financial health and wellness programs such as employer-sponsored savings accounts in your company.
What is financial wellness?
There is no exact definition for financial wellness — as people interpret the concept differently. In general, financial wellness means feeling secure with your finances and understanding how to make healthy choices. Instead of feeling worried, stressed, and confused about your income, you feel comfortable, confident, and equipped to make smart choices.
Financial health and wellness programs provide employees with the assistance and resources to enable smart economic decisions. They help workers become more financially secure overall.
What are financial wellness programs?
Financial wellness doesn't just mean paying your employees a living wage. It refers to implementing educational programs and resources that show employees how to live the life they earned, participate in the economy they have helped to create, and get through the ups, downs, and unknowns in life.
These programs can help employees reduce their debt, build savings, and develop the freedom to enjoy their life without money woes.
How do financial wellness programs help employees?
Being an employer is expensive. You want to give your employees as many benefits as possible but at the same time, you also have to protect your bottom line. You don't have unlimited resources, either. Financial wellness programs are perfect because they provide both you and your employees with benefits, helping to safeguard the value of your investment.
When workers are worried about their finances, they cannot focus. They aren't as productive. They are also more likely to get ill and take sick days. In contrast, employees who have a high level of financial wellness can focus better, are more productive, miss less work, and are generally happier to be at work because they feel they are appreciated.
How does financial stress reduce productivity?
Almost half of those with financial stress spend three or more hours per week at work dealing with personal finance issues. During this time, they may be calling their landlord to explain why the rent is late, doing the math to make sure their bank account isn't overdrawn, calling family to watch their kids because they can't afford daycare, or taking care of other financial emergencies.
Workers cannot be productive if they’re trying to juggle these types of financial stresses and their distraction costs you money. Imagine that you have 10 employees who are financially stressed and five of them are spending three hours per week dealing with financial issues. At $20 per hour, you’re spending $300 per week on employee stress and this estimate only covers the time that they are actively engaging with their financial issues.
It doesn't take into account how stress compromises productivity by making it harder to focus. Stressed employees lose 23 to 31 days of productivity per year – when you translate that to wages, the numbers are shocking. By investing in financial literacy and wellness programs, you help reduce and eliminate these stresses and you save your organization money.
How does debt affect productivity?
Being in debt also makes employees less productive. Workers with a lot of debt are twice as likely to miss work as their co-workers. Debt increases stress and anxiety which makes people more likely to become physically ill. It also complicates the logistics of handling emergencies.
An employee who has a pile of maxed-out credit cards and no savings is not poised to deal with an emergency. If their car breaks down, for example, they may not be able to take it to the mechanic or pay for a rental car to get to work. However, if they had savings or available credit on a card, they could handle the breakdown without it compromising their ability to get to work.
How does financial wellness affect turnover?
Financial wellness also affects turnover. When employees don't feel like they have the financial resources to deal with their lives, they typically blame their employer. After all, their employer is the one writing the checks that don't seem to cover their expenses.
Whether or not this blame is misdirected is immaterial — the fact remains that less than 50% of U.S. workers feel they are in good jobs and lower-income level employees are even less satisfied.
Turnover costs employers a lot of money. When an employee leaves, you have to spend time and money searching for a replacement, interviewing prospects, and training new hires. Additionally, if employees leave your business because they aren't happy with the pay or benefits, it hurts your reputation and compromises your ability to attract new high-quality hires.
How can employers improve their employees' financial wellness?
There are a lot of different ways you can improve your employee's financial health and wellness. Ideally, you should consider implementing a mix of education and programs that can help your employees save. Educational programs can include apps for self-directed learning, seminars, and workshops, while savings programs can include both retirement and emergency savings plans.
Contact Secure to help improve your employees' financial wellness today
SecureSave is an out-of-plan employer-sponsored emergency savings account solution. SecureSave is much simpler to implement than a retirement savings plan and can easily be integrated with your payroll. It allows your employees to make automatic contributions to a savings account through their paycheck.
To encourage your employees to save, you can make matching contributions or provide incentives when they hit goals. As they build up a savings account, your employees become less stressed and more focused because they know they have the resources to deal with most emergencies.
To learn more about SecureSave and to get started offering it to your employees, contact us at SecureSave today.