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.