In 2008, the United States began to fall into what is now known as the Great Recession. The economy found itself in a downward spiral that did not stabilize for 18 months and has taken years to recover. Since then, our economy has improved and in some areas exceeded the pre-2008 prosperity. Even with the great strides we have accomplished in the last ten years, many families struggle to accomplish basic financial goals. Despite record lows in the unemployment rate and high wages, as much as 78% of the US workforce is living paycheck-to-paycheck. What can you as an employer do to help? Just like encouraging physical wellness in the workplace, there are several things you can do to promote financial wellness in your employees’ lives.
What is Financial Wellness?
Generally speaking, financial wellness is the comprehensive approach to supporting an employee’s financial picture by looking at how everything fits together. While most companies only focus on a 401k, a good financial wellness program includes spending time on budgeting, getting out of debt, and saving for emergencies and the future. The best financial wellness programs help employees reach their goals through one-on-one meetings with a financial counselor, webinars, workshops, and even peer-to-peer groups. Meeting the individual needs of every employee is a daunting task, but providing your employees with the proper tools will enable them to take steps toward a better financial future.
Benefits of a Financially Fit Workforce
Recent research found that repeat users of the financial wellness tools provided by their employers have positively improved their financial habits over time. Additionally, this same study has found these employees were twice as likely to be on track for retirement and half as likely to suffer from overwhelming financial stress. Sixty percent of repeat users and 39% of new users claim to be more confident in their financial future thanks to the financial wellness programs implemented by their employers.
The Next Steps
If you are considering implementing an employee financial wellness program, there are a few things you should know and plan for:
- Beware financial sales disguised as wellness. Financial wellness is a big concept and there are a lot of firms out there trying to sell you programs and products that will help your employees. However, if they are trying to sell you an investment or an insurance product, that is not a financial wellness program. A real financial wellness program is unbiased and contains no sales pitch.
- Get management buy-in. As with any program, more employees will participate in a program if they see senior management supporting it. It shows the employees management cares about them.
- Offer in-person and web-based programs. Many employees feel embarrassed about their financial state and do not want to be seen seeking help. Online solutions are great, but sometimes these feel impersonal and it is hard to get the employee to take action. No one solution is going to work for everyone.
- Use surveys to assess expectations. Employers and employees should take focused surveys before and after any financial wellness program implementation to assess the success of the program.
- Proving ROI is near impossible. The success of a program can only be determined by the individual success of each employee. Employers are better off focusing on using the program to boost morale and reduce employee stress, which ultimately is productive for the company.
If your group is looking for programs to aid your employees, or are in search of any other employee benefit or education, contact us to speak to a consultant.