5 Reasons to Have a Financial Wellness Program for Employees
There is a direct correlation between financial health and physical health—research shows that poor financial health can lead to diminished physical health. The effects of financial stress on employees often translates into increased absenteeism, reduced productivity and can fuel higher employee turnover. This is why companies are beginning to address more than just the physical health of their employees into their benefits plan’s wellness programs and are recognizing the key role financial wellness plays in overall health. According to a survey conducted by the Financial Health Network, more than half of surveyed employees at midsized and large U.S. companies say that financial concerns are a source of stress even more than family or work-related problems.
Financial stress doesn’t discriminate. It affects employees from all backgrounds and income levels, and can ultimately impact a company’s bottom line. When employees are burdened with financial stressors at work, it can be consuming and exhausting and ultimately lead to overall dissatisfaction at work as well. A focus on improving the financial health of employees is a win-win for employees and employers.
According to 2020 research by SoFi/Sentiment where about 2,000 employees were surveyed, there are five top reasons that employers should have a financial wellness program.
1. Increase Productivity
- 40% of employees surveyed say that stress associated with financial problems affects their productivity at work and 55% say they stress about money issues on a daily basis.
- Employers state that improved financial wellness for their employees produces higher levels of satisfaction, loyalty, engagement and productivity.
- Employers who offer financial wellness programs see an average $348 reduction in operating costs per sick day, per employee.
2. Decrease Turnover
- 74% of employees believe financial wellness is an important benefit, and are more likely to stay with an employer that offers a program to help them manage their money.
- 59% of employees are less likely to leave a company that seems more empathetic to their needs.
- By including financial wellness into the workplace, corporations and employees can reap many benefits, including increased productivity and retention.
3. Improve Recruiting Efforts
- Financial wellness benefits provide extra value to your job seekers and reinforces that the employer values the employee’s overall wellness and life.
- A financial wellness program can help employers attract new talent and retain their current talent.
- The financial wellbeing of employees is an important aspect of company loyalty and can differentiate a company in a competitive job market.
4. Prepare Employees
- A 2019 report by the Federal Reserve showed that 37% of adults could not cover a $400 expense.
- A financial wellness program will educate employees on the significance of an emergency fund and encourage employees to create one, which provides peace of mind for unexpected financial challenges.
- Educating employees on the importance of retirement plans, such as a 401(k) can help employees save more for retirement and retire more financially secure.
5. Decrease Stress
- The COVID-19 pandemic has highlighted financial stress more than ever with 58% more people saying they have experienced financial stress in the last year.
- 22% of people have had to dip into their emergency savings funds in the last year
- But the good news is that 72% of employees experienced decreased financial stress after enrolling in their employer-based financial wellness program.
With the financial hardships employees are facing as a result of the COVID-19 pandemic leaving many loved ones out of work, it’s more important than ever to focus on the financial health of employees. A majority of employers agree that financial education boosts productivity, and have seen firsthand how financial competency carries through to employees' everyday jobs and work. The main goal of a financial wellness program is to improve the employee’s overall wellbeing. It’s the main reason why financial wellness programs are designed to support an employee’s ability to manage both short-term and long-term needs. The focus is not just creating a plan, but striking a balance between planning for immediate needs while also taking into account long-term goals.
Finances impact all aspects of an employee’s work and personal life. The survey results have shown that employees are eager to work for an employer who offer financial wellness benefits by implementing a comprehensive financial wellness program, employees can gain better control over their finances and get on the path to financial freedom.
If you’re interested in providing financial wellness for your company, SDCCU can help. We provide complimentary financial wellness education to local organizations and the community – it is something we are extremely passionate about! For a complete list of topics, email community@sdccu.com. Please visit SDCCU’s premier partnership page to learn more about all our exclusive offers and benefits.
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₁. SoFi/Centiment Research survey of 2,050 general population respondents from July 8, 2020 to July 9, 2020 https://www.sofi.com/blog/financial-wellness-benefits-survey-at-work