Business Health and Employee Financial Wellness
Companies increasingly support employees’ financial wellness, leading to improved well-being, productivity, and loyalty among workers.
BY STACEY CURTIS
Senior Vice President
In working with business owners and human resource professionals, I have witnessed a significant trend in companies offering financial wellness resources to their employees over the past few years.
A 2022 Bank of America study found 97% of employers feel responsible for employee financial wellness (up from 95% in 2021 and 41% in 2013) – with two-thirds (62%) going as far as to say they feel extremely responsible (up from 56% in 2021). Employees agree with this sentiment, as 82% say employers should support their financial wellness.
Financial health is a crucial element of overall well-being and extends beyond the amount of money in someone’s bank account. A financially secure workforce produces numerous benefits for employers and employees, including improved productivity and enhanced job satisfaction.
Advantages to the Employer
Greater productivity and engagement: Employers who invest in financial wellness programs have reported higher levels of engagement and a more dedicated workforce. When individuals have the tools and resources to manage their finances effectively, they are better equipped to focus on their work.
Reduced absenteeism: Financial woes often lead to absenteeism. According to a 2022 Ramsey Solutions survey, more than one-third of employees reported missing work because of a financial problem.
Lower turnover: By providing resources to help employees with retirement savings, employers contribute to their workers’ long-term financial security, promoting loyalty. In addition, financial stability reduces the risk of individuals seeking higher-paying opportunities elsewhere.
Positive company reputation: Job seekers find companies that offer financial wellness resources more attractive. Companies that prioritize their employees’ financial health tend to have a better reputation and are viewed as more desirable workplaces, which can draw in top talent seeking stability and support beyond their salary.
Employees can retire when eligible: Laying the groundwork early for a secure future allows employees to retire once they are eligible. Delayed retirement can have unintended consequences on the organization, such as higher compensation rates and increased health and disability claims.
Advantages to the Employee
Reduced stress: Financial stress is a leading cause of anxiety and depression. Financial security leads to peace of mind and an improved sense of stability.
Greater quality of life: Achieving financial wellness involves planning for major life events such as saving for emergencies, retirement, and other long-term goals. With the right tools and guidance, employees can pursue goals such as buying a home and saving for their children’s education.
Empowerment through knowledge: Providing financial literacy training during the employment onboarding process is one approach companies have taken to educate their employees. In addition, employers often organize lunch-and-learn sessions on various financial wellness topics, including the benefits of their 401k plan and matching contributions – encouraging employees to save early and consistently. Programs such as budgeting, debt management, and investment education empower individuals to take control of their financial futures.
Long-term financial security: Individuals who fail to lay the groundwork for a secure future often face large amounts of debt, are forced to work until later in life, and leave their families with financial and emotional stress.
By investing in employees’ financial health, companies secure a stable and motivated workforce, and contribute to the overall well-being of their organization.