Employees are looking to their employers to help them improve their financial situation. With a financial wellness program, employers can provide a desirable solution with little to no administrative work on their end.

Why are employees (and employers) seeking financial wellness solutions?

Reduced employee financial stress

Stress is one of the major causes of employee absenteeism and presenteeism.

Yes, I’m here. But I’m too stressed to do anything productive.

Of course, among the leading causes of stress are personal financial issues. As I point out in my book, The New Productivity Engine, money, or the lack of it, is a significant cause of chronic stress in America today. Over three-quarters of Americans regularly experience physical symptoms from stress including fatigue, anger, headache and changes in sex drive.

Financial wellness is the opposite of financial stress.

The 2018 PwC Employee Financial Wellness Survey notes employee responses about the meaning of financial wellness:

• 21% freedom from financial stress
• 21% freedom from debt
• 21% freedom from worry about unexpected expenses
• 18% freedom to make choices

Another interesting take away from the PwC study is that 54% of employees say they want to make their own financial decisions, but need help validating those decisions.

Increased employee engagement

In some cases, we might call it “employee loyalty” – people feel a positive relationship with their job and employer.

Writing in the Harvard Business Review, leadership educator John Baldoni says, “People want to come to work, understand their jobs, and know how their work contributes to the success of the organization.”

A 2014 Gallup study investigated five elements of well-being, including financial wellness, and found that employees who scored high in well-being:

1. Had lower absenteeism
2. Solved problems more effectively
3. Readily accepted change

Financial wellness is a big contributor to the sense of engagement by employees.

“My employer values me and provides help when I need it most.”

Organizations with a high level of engagement report 22% higher productivity. A Gallup study from 2013 surveyed 1.4 million employees and found that high engagement was a factor at firms with lower absenteeism and employee turnover rates.

Linking financial education and motivation

Teaching people how to use their money effectively is a growing trend. A recent article in The Wall Street Journal describes Personal Finance workshops that have started at Harvard and Princeton universities, as well as at other colleges and even high schools in some states. In these cases, the burden of student loan debt seems to be a motivator.

For many employees, learning how to build a nest egg or prepare for retirement may not be particularly important. Maybe some motivation is needed.

Prizes and rewards can make these tasks more interesting. Not only is a reward motivating, it’s fun! Who knew you could have fun, compete with your colleagues, and win prizes while learning how to pay off a credit card in the shortest possible time?

Of course, along the way, employees are taking small steps toward the ultimate goal of financial wellness.

Practical employee financial solutions

It used to be, as I say in The New Productivity Engine, that employers paid people, and how they spent (or misspent) their money was their problem.

Both employers and employees now embrace financial wellness programs – and that’s a big turnaround.

One of the reasons is the emergence of practical employee financial wellness solutions that eliminate situations such as payroll advances, 401(k) withdrawals, and employer loans by the organization. One HR director I know says that her company’s financial wellness program eliminates the need for her office to ‘judge’ whether the employee qualifies for help. “Putting that on an outside third party also saves embarrassment for the employee, often gets them help faster, and saves us a good deal of time.”

A combination of factors

It’s a combination of simple and complicated factors – practical and emotional – that help to improve productivity and advance profitability. Reducing stress and increasing engagement makes employees less prone to absenteeism and presenteeism. There is an emotional connection that forms when employees know that their employer wants them to thrive and has programs in place to help make that happen.

David Kilby has been president of FinFit since it was founded in 2008. He has grown the company from a single idea into the nation’s leading Financial Wellness Benefit platform, servicing over 150,000 clients. Prior to FinFit, David led a multimillion dollar financial holding company where he was inspired to find ways to help employees improve their financial health. He is committed to helping employees succeed today, and prepare to live healthier, more productive, financially stable lives.

Get in touch with him – he’d love to talk to you about your company, your employees and how he can help.

About one-third of workers are ‘actively engaged.’

Let’s start with the big picture. About 125.97 million Americans were working full-time in 2017. About 13 million adults of working age were unemployed.

According to figures from the Gallup organization, about one-third of workers are ‘actively engaged.’ That means, according to Gallup, that “they are involved, enthusiastic and committed to their work and workplace.”

Conversely, that means that about two-thirds of workers are ‘actively disengaged.’ The UNC Executive Development blog says, “They are unhappy and let that unhappiness show in words, attitudes and actions. They undermine the performance of others by constantly voicing their displeasure and listing the many reasons why they are so miserable in their jobs.” In other words, they actively hate their jobs, are less productive, and become an HR liability at work.

Financial wellness has a wide range of paybacks.

In my book, The New Productivity Engine, I discuss work-related topics like ‘engagement,’ ‘loyalty,’ and ‘retention.’ The focus of the book is about increasing productivity through a series of employee benefits initiatives that I call “financial wellness.” I delve into common employee problems – including stress, personal financial problems and motivation – to show that financial wellness has a wide range of paybacks for both employees and employers.

One of the major causes of active worker disengagement are personal problems, often financial problems. Employees become focused on the problem – not having enough money to pay the rent or buy food, not being able to support a child in trouble, for example – that they burn hours at work worrying and struggling to resolve the situation. This causes negative stress which spills over to impact their health, relationships and, ultimately, their job performance.

Twenty percent of American workers don’t have a savings account.

In my research I discovered that one-third of employees are distracted by personal financial issues at work. Over half of American workers have less than $1,000 in savings and one-fifth have no savings. That means they don’t have the tools or resources to cope.

An effective financial wellness program has three parts. Financial education – a personalized assessment coupled with a series of online modules, dashboards and tools that help workers better manage their spending, saving, borrowing and planning. Motivation – recognition, games, competitions, and tangible rewards that require a working knowledge of personal financial concepts. Real-world financial solutions – knowing that financial challenges and needs will occur – the program should have components to help solve these challenges by providing payroll deducted products and services that have been vetted and integrated.

A major employer benefit is increased productivity.

While financial wellness benefits may appear to be all about the employee, the employer has a great deal to gain. If one central component of employee anxiety is personal financial problems, what would happen if that problem, and the attendant negative stress, was largely mitigated or removed completely?

I believe that one major benefit financial wellness offers to the employer is increased productivity. Research indicates that forty-six percent of employees spend an average of two to three work day hours a week on personal finances. Imagine if an employer could recover a significant portion of that time. Other paybacks include reduced absenteeism, lower health costs and increased employee retention.

Higher levels of employee satisfaction.

Increased worker engagement is another big benefit for employers. A Consumer Financial Protection Bureau report says “Financial wellness… also produced higher levels of employee satisfaction with their financial situation. Indeed, employers who participated in the program noted that employees ‘had more energy’ and ‘higher engagement levels’ at work.”

In The New Productivity Engine, I also spend some time chronicling the history of worker-employee relations. Back in the feudal days, serfs toiled from dawn to dark on farms owned by the nobility, hoping to be able to save enough food to prevent starvation.

Then came the days when workers slaved away in mills from childhood to death. Life was often harsh, dangerous, and sometimes short.

We work to be appreciated, supported and fulfilled.

Then employers took a more hands-off approach. “I pay them and if they can’t manage their money, that’s their problem.” Increasingly now, employers are choosing a more enlightened tactic, providing help to workers who want to manage their money better.

“We work for satisfaction,” is my answer to the question. “Of course, we want to be paid, but we also work to be appreciated, supported, fulfilled, educated, and to be part of a team on a worthwhile mission. If we can find a job that offers those qualities, we will be loyal, actively engaged and productive. Financial wellness can help both the employer and employee achieve that goal. It’s a win-win for everyone.”

David Kilby has been president of FinFit since it was founded in 2008. He has grown the company from a single idea into the nation’s leading Financial Wellness Benefit platform, servicing over 150,000 clients. Prior to FinFit, David led a multimillion-dollar financial holding company where he was inspired to find ways to help employees improve their financial health. He is committed to helping employees succeed today, and prepare to live healthier, more productive, financially stable lives.

Get in touch with him – he’d love to talk to you about your company, your employees and how he can help.

That mindset is swiftly changing says David Kilby in his innovative book, The New Productivity Engine. “it’s the employees’ problem,” he agrees, “That is, until they start using company time and resources trying to fix their personal financial problems. Then it pretty quickly becomes the employer’s problem.”

Here’s a staggering statistic from the book: 46 percent of employees spend an average of 2-3 work day hours a week dealing with their personal finances, rather than actually working.

So how did we end up here? A short history.

For centuries there were two levels of people: Serfs who lived short, brutal lives and owned nothing; and nobles who owned everything, including the serfs. Then the tradesmen came along and became the middle class. They owned things, but were sneered at by the nobility, and the serfs were jealous.

Until the late 1700s, manufacturing was truly a cottage industry. Think – thousands of hand looms weaving cloth, and thousands of miners digging tunnels with a pick and shovel. Water power was the sole source of power, so the local grist mill had to be on a river.

Then came steam power and factories could be built anywhere. Some of these locations were in the middle of nowhere, so manufacturers built company homes and schools, and workers often owed their souls to the company store. Employers had a high level of involvement (good or bad) in their workers’ financial lives.

Then, following World War II, when the big manufacturing cities began to die, employees became more like free agents – able to move from job to job. Employers began to distance themselves from their employees’ personal finances. Which explains how we ended up here.

A win-win for everyone

Here’s the problem. Many workers (75% of them) were unable to manage their money in a manner that gave them rainy day cushions, coverage for medical expenses, and savings and retirement funds. Employers moved back into the workers lives with benefits like medical, disability insurance and retirement plans.

“That’s really great”, David Kilby agrees. But there’s a big part missing – personal financial education and the motivation to use it. He calls it ‘financial wellness,’ and the concept is becoming the latest employee benefit.

The reason is simple, Kilby says. “A financial wellness program offers employees financial education that helps them live more stress-free lives, save for emergencies, and help fund their retirement. Employers end up with highly productive workers who are engaged, loyal and stay with the company longer. It’s a win-win for everyone.”

For employers, the return comes from a number of places.

So, why would an employer take the time and effort, get involved in a worker’s personal financial life, and offer a financial wellness benefit?

First, is a documented financial return, according to Kilby. In The New Productivity Engine he cites results from several studies and organizations that found a return on investment as high as 3:1. The return comes from a number of places.

Second is the gain-back of previously lost hours. If 46% of your employees are spending two work hours a week on personal finances and you have 1,000 employees, you’re losing around 1,000 hours a week times 52 weeks a year. Do the math. How much money are you losing? What would you do with the money if you could get it back?

And third is the result of happier, engaged, loyal employees. It costs up to $24,000 to recruit, hire and get a mid-level worker up to speed. Think about it this way. For every employee who stays on the job for another year, you could put an additional $24,000 on the bottom line.

The culturally conscious employer

Somewhere between lifelong indenture to the company store and the employer who says, “Suck it up Buttercup, it’s not my problem,” is what David Kilby calls the “culturally conscious employer.”

“Culturally conscious employers believe that the corporate culture can positively impact performance,” he says in his book.  “They believe that when employees are happy, satisfied, engaged and present, the positive performance follows.”

David Kilby has been president of FinFit since it was founded in 2008. He has grown the company from a single idea into the nation’s leading Financial Wellness Benefit platform, servicing over 150,000 clients. Prior to FinFit, David led a multimillion-dollar financial holding company where he was inspired to find ways to help employees improve their financial health. He is committed to helping employees succeed today, and prepare to live healthier, more productive, financially stable lives.

Get in touch with him – he’d love to talk to you about your company, your employees and how he can help.

Used to be, in the ‘bad old days,’ that employers controlled their employees. Workers lived in company housing, shopped in the company store, and their children attended the company school – where they were trained to work for the company at a young age.

The cycle created social and labor abuses. Many workers suffered, and many employers got rich.

But eventually, times changed, and the culture shifted the opposite way. Employers took a “hands off” approach with their employees – especially their financial issues. Unions became increasingly powerful and larger. The power and control started to revert away from the employer and back to the worker.

Suck it up, Buttercup – you’re on your own

If an employee had a financial challenge, the typical employer wasn’t very helpful. They didn’t feel responsible for employee challenges that weren’t work-related, so it fell to the employee to figure it out.

Problem was, the employee all too often figured it out on work time. Potentially productive time was lost for the employer. The employee was stressed out and less productive. It was lose-lose all round.

The rise of the culturally conscious employer

Writing The New Productivity Engine, author and financial wellness advocate, David Kilby, says “From my perspective, there is a middle ground that makes sense. Employers need to provide a workplace environment that allows employees to be productive and successful.” He calls employers who follow this course ‘culturally conscious.’

“Culturally conscious employers believe that the corporate culture can positively impact performance. They believe that when employees are happy, satisfied, engaged and present, then positive performance follows.”

Creating the win-win scenario for everyone

In his book, Kilby looks at the situation from both sides.

“You don’t want to waste your time trying to solve the financial problems of your employees. They, in turn, don’t want the embarrassment of having to ask you for help. What we want to do is create the win-win for everyone.”

That win-win scenario, Kilby contends, includes a robust financial wellness program, properly launched, with motivation for employees, and a short-term loan solution that employees can access anonymously and easily.

Life’s bad situations usually require immediate cash

There are people who really enjoy their job and can’t wait to get to work every day. Then there are those who work because they have families to support, bills to pay and goals that require money. The latter probably includes most people.

For most employees, life goes on just fine until something bad happens. Unfortunately, the solution for many of life’s bad situations usually requires immediate cash.

Most people don’t have $1,000 available for an emergency

Research shows that approximately 75 percent of working Americans do not have $1,000 available for an emergency like a car repair, medical issue or even paying the rent or mortgage. Given such a situation, people have few recourses – tap a friend or relative, ask their church or other organization, or get a payday loan.

Any of these solutions usually require that the employee take productive time from work. The employer loses productivity. The employee gains stress. Everybody loses.

The role of the culturally conscious employer

Recognizing the fact that employees will have financial problems that will be solved on company time, the role of the culturally conscious employer is to provide, as part of the employee benefits package, a solution that works for everyone.

“I’m talking about a financial wellness program that helps ease the common stresses of daily life, so that the employee can increase the time and intensity of the focus on their work. Your productivity.”

He adds, “For the employee, that means getting up in the morning and recognizing that, despite all the daily work and life challenges, they’re going to work for an employer that cares for them on a personal level.”

Financial wellness offers additional benefits for everyone

The New Productivity Engine goes on to explain how financial wellness offers additional benefits for everyone. Employees benefit from reduced stress, anxiety and peripheral illnesses caused by stress.

Culturally conscious employers benefit from better employee retention, increased loyalty and decreased calls on 401(k) funds or requests for wage advances. Of course, the biggest benefit for everyone is increased productivity. As Kilby often says in his book, “Financial wellness is a win-win for everyone.”

David Kilby has been president of FinFit since it was founded in 2008. He has grown the company from a single idea into the nation’s leading Financial Wellness Benefit platform, servicing over 150,000 clients. Prior to FinFit, David led a multimillion-dollar financial holding company where he was inspired to find ways to help employees improve their financial health. He is committed to helping employees succeed today, and prepare to live healthier, more productive, financially stable lives.

Get in touch with him – he’d love to talk to you about your company, your employees and how he can help.