Setting Employee Financial Wellness Up for Success

Economic pressures such as inflation and higher interest rates have impacted how far an employee’s dollar goes. Employees have started looking to their employers for education and support on topics such as debt reduction, budget planning estate management, and the importance of an emergency savings account. For many HR teams, employee financial wellness is becoming a much larger piece of the puzzle.

Research shows that an estimated 60% of full-time employees are stressed about money. Astonishingly, even those making $100,000 per year or more often feel employee financial stress. As financial pressure continues to outrank other reasons employees look to change roles such as relocation, advancement, and remote or hybrid opportunities, many organizations are looking for ways to support their employees’ financial goals beyond their paychecks.

Financial Wellness

High inflation has contributed to employees’ financial stress, as many struggle to navigate higher prices, uneven wage growth and credit card debt. According to management services company ADP, 8 in 10 employees live paycheck-to-paycheck, and 25% don’t set aside any monthly savings. When employees are stressed about their finances, they’re more likely to be distracted, less engaged and less productive at work.

The Impact of Financial Stress

Worrying about finances can negatively impact employees personally and professionally. In the past year, Employee Wellness Survey respondents said financial stress had negatively impacted them in the following ways:

• Sleep (56%)
• Mental health (55%)
• Self-esteem (50%)
• Physical health (44%)
• Relationships at home (40%)

Financially stressed employees are less likely to be engaged at work, feel a sense of belonging or recommend their employer to friends or family. As a result, organizations may experience increased turnover, reduced productivity and weakened company culture.

Developing and Implementing a Financial Wellness Program

In today’s competitive business landscape, employers can use financial wellness programs to support their workforce and improve employee satisfaction, retention and productivity. The 2023 Employee Financial Wellness Survey by professional services company PricewaterhouseCoopers (PwC) found that 1 in 3 full-time employees say financial stress has negatively impacted their productivity at work. Financially stressed employees are also twice as likely to search for other jobs, and nearly three out of four (73%) are more likely to be attracted to employers that care more about their financial well-being.

Employers can offer financial wellness programs to help employees manage personal financial matters. These programs are designed to educate employees and help them reduce financial burdens. Financial wellness programs may include several resources, such as online education, budgeting tools, credit resources and financial coaching or counseling. Financial wellness programs often go hand-in-hand with organizational initiatives that promote employee well-being, encouraging healthy behaviors that can contribute to positive mental and physical health.

When developing a financial wellness program, here are a few questions to ask to get the conversation started within your teams:

• How will we communicate the new resources available to employees?
• What does the material look like?
• What is the overall goal of the program?
• How detailed or robust should the program be?
• What does the future timeline of the program look like?
• Is your organization looking to provide additional financial resources to support their employees’ financial goals (i.e. 401(k) or student loan contributions), or does the organization want to provide an actionable program where the employees learn how to adjust behaviors to better support their goals (i.e. budgeting tools)?
• What aspects of financial wellness does the program want to highlight?

It is important to consider employees at all stages of life and meet employees where they are and consider what financial challenges take up most of their time:

• Retirement Planning Assistance
• Student Loan Repayment Assistance
• Dependent College Savings Resources
• Debt Management and Reduction Support
• Homebuying Support
• Emergency Savings and Assistance Programs
• Employee Discount Programs

Implementing a financial wellness program can be a large undertaking for an organization; however, it communicates the organization is invested in its employees’ overall wellness and wants to support them in the journey to meet their goals. Employers who address employee wellness issues, such as financial stress, may experience happier, healthier and more productive employees. Connect with your AssuredPartners team for how to implement a financial wellness program that supports your employees' financial goals this year.