Finances are on many of our minds this month. In addition to a New Year, January marks Financial Wellness Month, a reminder for all of us to pay closer attention to our finances. For many people, resolutions are in order. In fact, according to a Principal Financial Group survey, nearly three-fourths (71%) of those surveyed made a financial resolution for 2022.
Financial wellness isn’t just about how or where we spend our money; it’s also about the emotional connection we have with our ability to manage finances. Here’s why that’s important: Financially-stressed employees admit to using working hours to handle personal money issues1. Keeping employees focused on work while at work is important for an organization’s performance as well as its culture.
Poor financial health can impact employee physical health, and increase absenteeism, tardiness, and turnover.
Employee Financial Stress – in a Pandemic
Two years into the reality of COVID-19, many employees are recovering from pandemic-related financial issues and are expecting additional financial stress – leading to a not-to-positive outlook for 2022. According to research by The Harris Poll on behalf of Purchasing Power, only half (52%) of full-time employees surveyed expect their household financial situation to be better this January vs. January 2021. And half (51%) of employees anticipate their financial stress level will be the same or worse this month than it was a year ago.
Enter the Great Resignation.
Employees are moving to new jobs, seeking new opportunities, and employers are competing for top talent and attempting to retain existing talent. Employees say that one way for employers to show they care is through the benefits they provide – especially financial well-being benefits.
According to The Harris Poll survey, 78% of full-time employees say they can tell how much their employer cares about their financial well-being by the benefits they offer. Further, 79% of full-time employees say they would be more likely to stay with their present employer if there were more financial well-being benefits in the employee benefits package.
Employee retention can be costly. Adding a selection of financial well-being benefits that are voluntary benefits doesn’t cost an employer to provide; however, it can have a positive impact on employee loyalty and job satisfaction.
In the Harris Poll survey, employees were asked their preferences for some of the financial well-being benefits that could be added to the employee benefits package. The top-ranking benefits that Harris Poll respondents expressed an interest in are:
- employee purchase program (28%);
- bill payment program (27%);
- financial counseling (24%); and
- low interest installment loan (24%)
The Bottom Line
Benefits matter. A tenure study of a 594,000 eligible employee population of our customer database using our employee purchase program over a 12-month period showed a decreased turnover rate of 45%.
It’s going to take time for employees’ financial situation to recover. Employees have said financial well-being benefits matter. Offering additional benefits to improve workers’ financial well-being is a smart move for employers.
I’d love to hear about some of the ways you are focused on addressing employee financial stress.
More information about The Harris Poll findings on employees’ financial situation in The State of Employee Finances: 2021.
1 Better Money Moves, “How Financial Stress Affects Job Performance,” Liz Stevens, Feb. 5, 2020.