January is Financial Wellness Month – a wakeup call to employers about their role in employee financial health. It is a significant concern today because employers recognize that financially healthy employees result in a more engaged, productive and reliable workforce.
Recent statistics illustrate the continuing state of concern. John Hancock’s just-released 2018 Financial Stress Survey shows that a majority of workers (69%) are stressed over their finances, leading to a range of behaviors that can cost companies $2,000 per employee in excess labor costs. And 37% of Millennials; 34% of Gen X; and 16% of Baby Boomers report they are distracted by their finances at work, according to ADP’s Financial Stress and Workplace Performance Report.
Financial stress is not a new problem and financial wellness efforts are not a new solution. Employers need to address the workday impact of their employees’ financial stress by providing them with benefits, education and training tools to help them prevent major financial issues, change the course of their financial decisions and improve their financial wellness.
So, what strategies can employers take to improve the financial wellness of employees?
1. Review and consider adding to financial wellness offerings in the employee benefits portfolio. Financial wellness is more than an LTD benefit or retirement fund. Take a look at benefits such as financial counseling and employee purchase programs. For example, financial counseling may be a way to set them moving forward on a positive financial track not just in the short-term, but especially in the long-term. Likewise, taking advantage of acquiring needed household items such as computers, appliances and furniture through their employee purchase program can get them going on a disciplined buying, more financially-responsible purchasing endeavor.
Employers should remember that financial wellness needs can differ among employees, so consider adding benefits to address their varying needs – such as a student loan repayment benefit. Student loan debt continues to reach record highs and it even exceeds credit card debt and auto loan debt. More than one-third of employees overall (and 55% of millennials) said student loan repayment is a must-have benefit, according to a Unum study. With only 4 percent of employers currently offering employees some form of assistance to repay student loans, finding ways to offer student loan refinancing and repayment benefits would be a meaningful benefit for a large portion of the workforce.
2. Point out the free financial wellness tools and resources available to employees. Many employers offer some type of free financial wellness tools or resources (such as developing and managing a budget; improving saving, etc.) or they may be available through some of the employer’s providers.
3. Work on doing a better job of educating employees about financial wellness benefits throughout the year. More than one-third (37%) of employees indicate their employer provides no education about benefits. While that may or may not be true, nevertheless that is the employees’ perception. With so many benefit offerings available today, it can be mind-boggling to employees to be aware of them all and to understand them. Year-round benefits communications in a multitude of communication methods that appeal to each generation and on platforms and devices they pay attention to is mandatory.
Learn more about the financial stress of employees and how Purchasing Power can play apart of your financial wellness program.