What is financial wellness?
The Consumer Financial Protection Bureau defined financial wellness as a state of being. It is where you have control over your day-to-day and month-to-month finances. They also identified it as having the capacity to absorb a financial shock. It can also be defined as having the financial freedom to make the choices that allow you to enjoy life.
PWC has provided a lot of great resources around employee financial wellness. They did a study in a survey of employees to help define financial wellness. The employees defined it as being stress-free and achieving financial stability.
What are the employees stressed about?
Financial challenges and money matters are the most significant causes of stress. The current impact of COVID-19 increases stress for the employees for income and jobs. Then, there are relationship concerns and health concerns. But o financial challenges are still the number one concern above all.
Primary concerns of the employees:
- Insufficient emergency savings
- Inability to meet monthly expenses
- Credit card debt and reliance on credit cards to pay basic expenses
- Not being able to retire
- Losing their job, or a reduction in Pascale
- Healthcare costs
Benefits of Employee Financial Wellness Program
The most important reason for decreased productivity is financial stress. The employees worry about their financial status and other issues. This results in decreased productivity. Research shows that 64% of the employees spend time on their finances at some point during work. Spending less time worrying about financial situations can increase productivity. So, a financial wellness program for the employees would be of great help to the employees. This can also benefit the company.
Decreased Stress Level:
Research shows that almost 65% of the employees have high financial stress. This may sometimes rise to moderate financial stress levels too. It also shows that the workers under the age of 35 are the most stressed ones due to their financial situation. In this case, a financial wellness program can help reduce their stress level.
There are other benefits of employee financial wellness program too:
- Increased health and fewer sick days
- Higher job satisfaction and engagement
- Increased knowledge of available benefits and increased participation in benefit programs
- Increased satisfaction with salary and benefit programs
- Improved employee recruitment
- Change in workspace culture that values financial wellness.
Strategies and best practices
If you do not have a financial wellness program, it may seem daunting and expensive to where, to begin with. The first thing that you should do than creating a new program is increasing awareness.
You should focus on increasing awareness of existing benefit programs. You should understand the needs of the employees. You can gather feedback to understand your employees’ unique financial challenges.
The other thing that would be beneficial is to form a working group. It would allow the employees to help shape the program. In this way, you can identify the champion. Someone who is an influencer or a trusted staff. Think of someone whom other people follow.
Employees love incentives. So, incentives, competitions, and rewards are a great way of engaging the employees. So, consider utilizing incentives and rewards. Another suggestion that can be applied is, start slow and build upon it. You do not have to do everything at once. First focus on increasing awareness of available benefits. Then next you offer a couple of workshops. This would a better approach than approaching everything at once.