Financial Wellness Programs For Staff Made Easy

You don’t have to be a math whiz to know that sky-high inflation + the impact of a global pandemic = financial hardship and uncertainty. Worrying about paying bills and funding futures has an impact on well-being — including in the workplace. 

Employers may already offer financial assistance in the form of 401(k) matching or healthcare benefits, but financial wellness programs take things a step further. They offer additional support and education to help employees feel more confident in managing their money. 

85% of employers of employers confirmed these programs have boosted their employees’ mental, emotional, and social well-being. But how do you implement a financial wellness program that genuinely improves your employees’ lives? 

In this guide, we’ll explain why financial health is so important, explore examples of successful programs, and give you some financial wellness program ideas. 

What is Financial Wellness and Why is it Important? 

Financial wellness (or well-being) means feeling comfortable with your financial situation and your ability to manage money. You have peace of mind over your financial responsibilities, both now and in the future. In short, it’s a low-level of money-related stress. 

Employees with sound financial health can build savings as well as pay their day-to-day bills. They have a basic understanding of investments, insurance, and taxes and the advantages of company benefits.

Conversely, those with poor financial health likely struggle to get by and constantly worry about the future. That financial stress affects both mental and physical health, which translates into low morale, engagement, and productivity at work.

A PwC financial wellness survey revealed:

• 60% of full-time employees said they were stressed about their finances. 
• One in three said worrying about money negatively impacted their productivity.

It’s clear that financial wellness not only affects an employee’s overall well-being, but also that a lack of it has a negative impact on organizations. That’s where financial wellness programs in the workplace come in.

What is a Financial Wellness Program?

An employee financial wellness program is a company-wide effort to educate employees on money matters and reduce their financial stress.

Whether it’s household budgeting, paying off debts, or saving for a particular life event, these programs help employees better manage their money through team workshops, personal coaching, online learning, or a combination of all three.

Organizations may also provide relevant resources, such as digital budgeting tools and a knowledge base with FAQs on common topics. Employees have 24/7 access to this information and support, so they can find answers whenever needed.

Given that financial well-being impacts physical and mental well-being, some employers bucket these offerings under their employee wellness programs.

What Are the Benefits of Financial Wellness Programs For Both Employers and Employees?

Workers who participate in wellness programs are twice as likely to have a high financial wellness rating than those who aren’t offered resources or don’t participate. Moreover, financial wellness programs can provide many benefits for employees and employers alike:

Reduced Stress

When staff are living paycheck-to-paycheck, with little or no savings and a dread of unexpected expenses, their stress levels are sky-high. Financial wellness programs can remove the mystery around financing, giving employees the confidence to manage their budgets well and invest wisely.

Improved Engagement

Employees can’t fully do their jobs if financial worries are always on their minds. Being physically present at work but mentally disconnected (a.k.a., presenteeism) creates disengaged employees, which can hinder the organization as a whole. 

But, when those employees are given financial support and assistance, morale and engagement levels are likely to increase.

Improved Retention and Recruitment

As well as reducing stress, financial wellness programs show your employees you care about them. Both factors not only make them less likely to quit, but also build a reputation as a caring employer.

This can be a differentiator in your recruiting efforts, too, as more applicants seek out companies offering attractive benefits.

Lowers Costs

Companies offering financial wellness programs can reduce other operational costs, such as turnover, absenteeism, and lack of productivity. For example, financially healthy workers may retire earlier, which can lower the cost of healthcare provision.

Higher Revenue

All of the above adds up to a potential increase in revenue for your business. When staff are less stressed and more engaged, they’re more productive, leading to better performance and output. Happy workers lead to happy customers, too.

What Should the Best Financial Wellness Programs Include?

What you include is up to you, but here are some common elements of successful financial wellness programs:

• Educational support: Knowledge is power. Provide access to financial wellness courses and other learning materials to educate employees about important topics, like how to save for emergencies, prepare for retirement, and understand loans.
• Financial wellness tools: Look at interactive solutions that employees can use to make financial decisions. Think digital budget trackers, debt calculators, and retirement dashboards that provide easy tracking and goal-setting.
• Employee Assistance Programs (EAP): Sometimes you need to talk to an expert. EAPs help workers deal with personal issues that may affect their work performance and provide confidential access to support services.
• Benefits Education: Your benefit offerings impact your employees’ financial well-being, so provide clear and understandable benefit breakdowns for easier decision making.
• HRIS Integrations: Look for programs that easily integrate with your HRIS to limit the administration burden on your end.

Broaden Your Benefits to Encompass Financial Wellness

Financial wellness programs can go beyond education and digital tools. Take a holistic approach to your benefits package and include some offerings that bolster financial wellness:

• On-demand pay: Employees have early access to the wages they’ve already earned instead of sticking rigidly to traditional weekly or monthly payment schedules.
• Split-to-save: Employees can save a fixed amount of each paycheck into a specific account, which promotes better saving habits.
• 401(k) matching: The employer matches each employee’s contributions to their retirement plan.
• Employee incentive programs: This can include career development, tuition reimbursement, stock ownership, or profit-sharing.
• Health Savings Accounts (HSAs): Employees and employers can make pre-tax contributions to a savings account dedicated to healthcare-related expenses.
• Student loan assistance: Consider contributing towards employee student loan payments. In the U.S., employers can contribute up to a certain amount each year tax-free.
• 529 plans: The company helps employees set up savings accounts to fund education for themselves or family members.

How to Demonstrate the ROI of Financial Wellness Programs

If you’re considering a financial wellness program, you’ll need to add up the costs. These can vary widely, depending on the size of your company and the amount of assistance you want to offer. So, how do you prove the results will be worth the outlay?

The first step is to find out how the lack of a financial wellness program is affecting your business. For example, you can calculate estimated lost productivity due to financial stress.

Per the PwC survey mentioned earlier, 60% of employees are financially stressed, and 56% spend three hours or more of their working week on personal finance issues. Assuming a 47-week work year, the lost time adds up to 141 hours per worker.

Here’s how you can calculate the impact for your own organization: