To help you understand the significance of financial wellness and how to implement effective programs, we'll explore the impact of financial stress, the driving trends behind this movement, expert insights, and practical steps for integrating these benefits into your organization.
Financial stress is more common than you think. Did you know that 63% of Americans live paycheck to paycheck? That includes 51% of high earners making over $100k. And 57% of employees don’t have enough savings for a $1,000 emergency. These money worries can crush job performance, spike absenteeism, and drive up turnover rates. Employees stressed about finances are more likely to suffer from health problems, which impacts their work and well-being.
Several trends are making financial wellness programs a must-have:
Rising Student Debt: With student loan debt in the U.S. over $1.7 trillion, many employees start their careers deep in debt.
Lack of Financial Literacy: Without proper financial education, many people make poor money choices, leading to more stress.
Economic Uncertainties: The COVID-19 pandemic showed us how important financial stability is, with many employees facing unexpected money problems.
Amanda Peppers from Northstar, an organisation providing financial guidance through employers, explains:
"Finances impact an employer’s entire workforce -> as opposed to reviewing benefits that are for segments of the population or a small percentage of the demographic, robust financial wellness programs positively impact their entire employee population, leading to greater outcomes, improved retention, and decreased financial stress for all employees."
Employers are stepping up as stewards of their employees’ financial health. By offering comprehensive financial wellness programs, they bridge the gap in financial education and support, creating a healthier, more productive workplace.
BenefitPitch Hot Tip
It's crucial to meet employees where they are. In the past, financial wellness focused on saving more for retirement. But with stats like 57% of employees not having enough savings to cover a $1,000 emergency bill and rising student loan debt, it's clear we need more programs like debt consolidation, earned wage access or pay on demand, and credit building before we can focus on saving more for retirement.
Financial wellness programs offer a range of services to help employees handle their finances better. These can include financial education through workshops and webinars, debt management assistance, retirement planning guidance, and investment advice. Other services might cover student loan repayment programs, emergency savings initiatives, and earned wage access for immediate financial needs. These offerings empower employees to take control of their finances, reduce stress, and improve their overall financial health.
For a deeper dive into these services, keep reading to learn how they can be implemented and benefit your organization.
The Financial Wellness service category has recently been trending on BenefitPitch, showing an increase in interest across brokers and employers. Amanda Peppers from Northstar highlights some of the reasons why:
“Robust financial wellness programs positively impact the entire employee population, leading to greater outcomes, improved retention, and decreased financial stress for all employees.”
So, why do forward-thinking organizations jump on the financial wellness bandwagon? Here’s the scoop:
Cut Down Financial Stress: These programs lighten the financial load on employees, improving their mental and physical health. When employees aren’t stressed about money, they can focus better on their work.
Keep Talent Around: Employees stick around longer at companies that genuinely care about their well-being, including their finances.
Shine as an Employer: Offering comprehensive financial wellness programs shows your company truly cares and is ahead of the curve, making it more attractive to top talent.
Financial wellness programs come in all shapes and sizes, designed to help employees manage their finances effectively and reduce financial stress. Employers can choose from a variety of services tailored to meet diverse financial needs. Here are some examples of the financial wellness benefits available:
While you’re evaluating the needs of your workforce and selecting which benefits to include in your Financial Wellness program, consider what Chad Schneider at Origin has to say about the need for a well-rounded program to address the current economic climate:
“We are currently facing some of the most volatile economic times in the last forty years in the US and employees are struggling with inflation, interest rates, budgeting, financial literacy, etc. As you dig deeper into the state of mental health you will uncover the financial implications that cause a number of the challenges that employees and their families are facing right now. The majority of the employers today either offer an EAP with "some" financial wellness tidbits or access to a 401k vendor. Employees need more! Employees want and need personalized advice and guidance, the ability to have both digital tools as well access to professionals, dynamic platforms that provide real time insights into spending, investments, education, estate planning, tax filing and so much more. If you have not taken a deeper look at financial wellness, there is no better time than right now! ”
When choosing financial wellness programs, employers can opt for specialized solutions focusing on specific areas, such as student loan repayment or retirement planning, or aggregators that offer a range of solutions under one platform.
Specialized solutions come at a higher per-service cost but offer a tailored, in-depth expertise in a specific area.
Aggregators provide multiple services under one platform at a bundled rate, offering comprehensive support for various financial issues at a lower collective cost.
While aggregators can provide a more holistic approach, it’s essential to evaluate whether the quality of each individual service meets the organization's and employees’ needs.
Consider your employee base when deciding. If your workforce is diverse, an aggregator might be the best fit. If you have a concentrated demographic, like new grads or senior executives, specialized solutions may better meet their specific needs.
Choosing the right type of financial wellness program depends on the specific needs and budget of your organization. BenefitPitch makes this process easier by connecting you with over 1,400 top-tier benefits providers, allowing brokers and employers alike to find, review, and compare various financial wellness vendors and find the perfect fit for their organization.
Integrating financial wellness programs into existing benefits packages takes careful planning and teamwork. Here’s how:
These steps will help employers successfully integrate financial wellness programs into their benefits offerings.
Set the Right Metrics. These can include: employee participation rates, financial health improvements, tracking changes in savings, debt levels, and credit scores. You can also conduct an ROI analysis and compare the program's cost with benefits like reduced absenteeism and higher productivity.
Gather Employee Feedback: Use surveys, focus groups, and interviews to learn about employees’ experiences.
Monitor Usage Patterns: Track service usage and popular program aspects.
Conduct Regular Reviews: Review data and feedback regularly to find improvement areas and make adjustments.
Continuously monitoring and analyzing data ensures financial wellness programs stay effective and relevant to employees' needs.
Financial wellness programs are a must-have for any solid benefits package. These programs tackle financial stress head-on, boosting well-being, productivity, and retention. When employees get access to financial education, debt management, and retirement planning, their stress levels drop, leading to a happier and healthier workplace.
The stats from Bank of America’s Workplace Benefits Report illustrate it best: 91% of employers see higher employee satisfaction when they offer resources for overall well-being, and 97% of employers feel responsible for their employees’ financial wellness. This sense of responsibility pays off—more than 80% of employers say financial wellness support makes employees more satisfied, loyal, engaged, and productive.
Not sure where to start? BenefitPitch connects you with top-tier financial wellness providers. With our comprehensive database and tools, benefits brokers and employers can easily find the perfect programs for their organizations.
Reach out to our team at sales@benefitpitch.com to learn more.
Sources:
1. Effects of employers offering financial wellness benefits 2020. Published by Statista Research Department, May 31, 2022
2. 2022 Bank of America Workplace Benefits Report, “Navigating a new era of financial wellness”