Guide: 7 Ways to Improve Your Employees' Financial Wellbeing

July 3, 2019 Danielle Ashbaugh

Even a millionaire can be stressed about money. Financial issues and stress affect employees across the income spectrum, creating distractions at work for 35% of employees.1  Daily financial pressures may include:

  • Preparing for today’s expenses. Unfortunately, one in four employees have student-loan debt.2
  • Planning for the future. Sadly, three out of four U.S. workers are living paycheck-to-paycheck, and only 41 percent are financially on track (or even close) to retire at age 65.3,4
  • Protecting themselves. Most people are not sufficiently protecting their income or managing risk in case of critical illness or the need for long-term care.
  • Preserving lifetime assets. Managing taxes to plan for lifetime income and estate planning are not top of mind for most people. Only 21 percent of organizations are supporting their employees with solutions.5

More stress about finances means a higher likelihood of health issues, from stomach ulcers and migraines to high blood pressure and heart attacks.6 People with high financial stress also are over seven times more likely to have severe anxiety and nearly six times more likely to have severe depression.6

 

But there’s hope! Organizations that offer financial wellbeing programs have healthier, happier and more productive employees. 

 

The financial wellbeing programs that employees want most from their employers include access to a personal investment adviser, online tools, seminars, and credit or debt counseling.7  Investing in these programs can ease your employees’ stress and help your employees feel more confident in their ability to manage their financial lives today and into the future. Regardless of the specifics of the program, organizations with financial wellbeing programs tend to have more employees contribute to their retirement plan, feel satisfied with that plan and save for health care expenses.7

“Investing in these programs can ease your employees’ stress and help your employees feel more confident in their ability to manage their financial lives today and into the future."

Here are seven ways you can help.

 

1. Start by listening.  

Find out what your employees really need and want. Look at utilization of your retirement benefits to see what employees are doing and not doing; conduct employee surveys and focus groups to see what employees want and value; talk to leadership about how financial wellbeing should fit into the organization’s wellbeing or employee value proposition.
 

2. Develop a plan. 

When offered financial wellbeing programs, 83 percent of employees say they find them valuable.7 Making a financial wellness program a priority sends a strong message that the wellbeing of your employees matters to you. Before you can get started, you need a strategy that reflects your vision, objectives and audience.
 

3. Drive individual and family behavior change. 

Through education, planning and counseling services, organizations can — and should — influence employees and their families to make better financial choices. This requires engaging employees and families who may not believe they are ready to change certain behaviors. It also requires motivating those who are making the right choices to continue doing so. With the right mix of tailored services, employees will be more likely to define personal financial goals and create a personalized plan to help them set aside emergency savings, monitor spending, reduce debt and save for retirement.
 

4. Design benefits with employee wellbeing in mind. 

It’s well-known that, over the years, organizations transferred significant risk to their employees. While pay raises decreased, the amount employees had to pay in health care expenses increased. As pension plans faded, employees had to save more in their defined contribution plan. At the same time, people are living longer, meaning they need even more income for retirement and retiree health care. Organizations must think and act differently to deliver competitive, value-added and cost-effective benefits without continuing to shift costs to employees. Employers need to reorient the traditional silos in benefit offerings to focus on how, together, these designs can support the ability to both build and protect wealth for employees.
 

5. Involve your vendors. 

Vendors address a range of key areas when it comes to financial wellbeing. They might have educational resources, modeling tools, or even serve as financial coaches — all helping employees learn to better manage their budget, savings, debt, credit, or refinance or access loans. Some vendors can provide employees same-day access to earned yet unpaid wages without having to wait for payday so that they can pay their bills on time without incurring late or overdraft fees.

 

6. Tap into your broader community. 

Organizations can get support for their financial wellbeing program by tapping into community or advocacy groups. For example, organizations can partner with local banks or credit unions to promote services that would help their employees. They can partner with advocacy groups to further promote their programs (partnering with a working parents group for a seminar on saving for college and partnering with a millennial working group for a seminar on paying down student-loan debt).
 

7. Break through to your employees with targeted marketing.

Your employees are busy. Their financial wellbeing should be a priority, but often isn’t. Organizations need to market their financial wellbeing programs to engage their employees. Organizations should consider segmenting messages to better target their audiences; use visuals, infographics and video to help engage their employees; avoid overwhelming employees with too much information; and provide focused guidance that shows the impact or benefit of financial wellbeing to employees.

 

Investing in employees’ financial wellbeing can give employees the resources, opportunities and commitment they need to be their best. It can also foster engagement and, just as important, it makes sure that you maximize all of the great resources that you are providing for your employees and their families!
 


 

Sources:

1. PwC, 2019 Employee Financial Wellness Survey

2. Alight, 2019 Health and Financial Wellbeing Mindset Study

3. Career Builder, Living Paycheck to Paycheck is a Way of Life for Majority of U.S. Workers, According to New CareerBuilder Survey, 2017

4. Aon, The Real Deal—2018 Retirement Income Adequacy Study

5. Aon, Hot Topics in Retirement and Financial Wellbeing, 2017

6. Associated Press-AOL Health Poll: Debt Stress, 2008

7. Alight, Financial Mindset Study, 2017

 

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