The Top 5 Benefits of an Employee Financial Wellness Program
When evaluating options for inclusion in your employee benefits package, consider the positive outcomes a financial wellness program can bring to your organization. By giving employees the tools and resources to cope with their current financial situations and make better money decisions related to saving, spending, borrowing, and planning, you’ll see countless positive returns. These are the top 5 benefits your company could benefit from by offering an employee financial wellness plan.
#1: Increased employee focus and productivity
Can you think of the last time a situation had you stressed out and so preoccupied it was difficult to focus at work? With 78 percent of U.S. workers living paycheck-to-paycheck and more than 70 percent stating they’re in debt, you can imagine how much focus during work hours is devoted to money-related stressors. In fact, 78 percent of workers struggling financially have indicated financial stress creates distractions that negatively impact their productivity. According to a John Hancock Financial Stress Survey, workers stressed over finances cost their employers about $2,000 per employee. The restless nights of those burdened by debt result not only in a reduced ability to perform well while at work, but they are also a contributing factor in increased absenteeism. This brings us to our second benefit…
#2: Decreased absenteeism
Financially stressed employees miss work for various reasons. Lack of sleep, stress-related health problems, along with challenges directly related to financial issues, impact the increase in absenteeism with this segment of workers. Employees dealing with financial related stressors are twice as likely to miss work. Further complicating the issue of stress-related health problems is that those struggling with debt are more likely to be impacted and yet may be more reluctant to seek medical help, being unable to pay for treatment.
Offering employees a financial wellness program that includes education, as well as financial solutions and one-on-one personalized help from financial coaching, can help struggling employees overcome their financial challenges and return them to work both in mind and body.
#3: Increased employee 401k contributions
Employees who put off retirement can cost their employers $20,000 to $30,000 a year in presenteeism, workmen’s compensation, and healthcare costs. According to a MetLife study, 37 percent of employees expected to postpone retirement due to their financial situation. 30 percent of those surveyed in the same study have already dipped into their retirement savings, adding to the challenge of having enough money saved by the time they are eligible to retire.
A financial wellness program can educate employees on the importance and benefits of a 401k plan, provide resources such as budgeting tools and financial calculators to help them reallocate money spent on non-essentials (unused subscriptions for example) to a retirement plan and encourage saving for emergencies to reduce problematic raids on their 401ks.
#4: Retention of valuable employees and a competitive edge for attracting prospects
With unemployment remaining low at 3.7 percent, offering benefits employees are asking for will not only help retain quality employees but can also help to bring in sought-after top talent. 60 percent of employees interviewed in a study conducted by the Financial Health Network indicated they would more likely stay with a company that helped them better manage their finances. 82 percent of workers in a Prudential Survey indicated they would like employers to provide free financial education courses on subject matter including retirement planning, emergency savings, and budgeting.
#5: Saved money
To a certain extent, an employee’s financial woes are also a financial burden experienced by their employers. Not only in the cost of lost productivity, delayed retirement and the cost of employee turnover in a highly competitive market, but there are also other associated costs of employing workers struggling with financial circumstances, such as wage garnishment.
Employee wages garnished by creditors take up time and tie up resources in the payroll department. A financial wellness program that provides employees with financial solutions and one-on-one coaching can help them deal with existing debt, significantly reducing wage garnishments. One study found increased financial wellness decreased the likelihood of wage garnishments from 4.80 to 1.84 percent.
Employers also experience the additional cost of their employees’ financial challenges through stress-related medical claims. Financially stressed employees are twice as likely to suffer from poor health and are more susceptible to debt-related stress issues such as back and muscle tension, ulcers, high blood pressure, migraines, insomnia, anxiety, and depression, all of which can increase health claims for their employer.
One final consideration…
You may already offer or have access to offer financial wellness through your bundled package of benefits. You and your employees will only realize the benefits that come from a financial wellness program if they actively use their benefit. A Morgan Stanley Study reported 42 percent of employees felt inadequately informed about their benefits and programs. Many said they would be more apt to use their benefits if they were clearly explained and easier to access. Get the word out. Encourage and incentivize participation. And if you don’t offer a financial wellness plan yet, you now have these 5 benefits for consideration.