Employee financial stress has reached epidemic proportions in the U.S. Many employees still haven’t recovered from the last recession and are living paycheck-to-paycheck. Financial problems are the number one stressor for the majority of people, and for many, financial stress spills into the workplace in the form of absenteeism, garnishments and lower productivity. According to a study conducted by PricewaterhouseCooper titled “Employee Financial Wellness Survey”, almost half of employees spend three or four hours per week distracted by personal finances.
Financial wellness programs are designed to help reduce distractions, improve morale and reduce the time needed to attend to financial issues. They can help employees improve their retirement readiness, reduce their stress and prepare for major life events. Employees that have their finances under control are better able to focus on their jobs and increase productivity on the job.
Wellness and financial programs have been around in the workplace for some time. But financial wellness is something different than either of these. Financial wellness is a program designed to address and support an employee’s complete financial picture and improve their overall financial health. It encompasses:
Financial wellness programs are more important than ever. Millennials are especially in need of financial planning. This generation, now the biggest generation in the workforce, is dealing with high student debt and low starting salaries. According to a study conducted by ADP, 55 percent of employees welcome help managing their finances and 83 percent agree that employer financial benefits are critical to their financial security.
If you’re considering offering a financial wellness program for your employees, you will find a wealth of resources to help you decide how to structure and execute your program. Employers who have already established financial wellness programs found that financial advisors or financial planners were the most effective when designing a program. Other helpful resources include:
Financial advisors are a good resource because they already provide many of the same services to their clients. They may already provide guidance for a company’s retirement plan by helping employees with retirement basics and long-term saving and investing. Financial wellness programs give employees the tools to make better financial choices and create strategies for long-term saving.
According to the ADP study, high-touch delivery methods, such as seminars, one-on-one coaching and phone support are the most effective. Other types of delivery methods, such as self-study guides, mobile apps, games and incentives are useful, but less helpful than the high-touch delivery methods.
Even though the economy is improving, many families are one paycheck away from financial disaster. Unfortunately, financial stress often affects the workplace, resulting in reduced productivity, increased absenteeism and higher healthcare costs. Financial wellness programs, while relatively new, are a cost-effective way to help employees manage their finances.
Many employers want to help alleviate the financial stress of their employees. Maybe it’s time for you to take the next step and consider starting a financial wellness program at your company.
Looking for a better way to control costs and leverage your employee benefits plan? Contact Lanier Upshaw to learn more about our expertise in providing guidance in all aspects of employee benefits available to employers today.