Apr 12, 2021 | Clare Chiappetta, MA, HRCI Contributing Writer
How to Support Workforce Financial Wellness
Financial insecurity is one of the leading causes of stress, and it could be derailing productivity at your organization. In fact, recent data reveals that 58 percent of employees are stressed about their finances, and 50 percent of those employees admit to financial stress causing distraction at work. Improving your workforce’s financial wellness can boost employee productivity, engagement and satisfaction.
“Workforce financial wellness programs help increase employees’ knowledge and education and can help change their behavior and outlook,” says Carol Turpen, SPHR, Owner and Principal Consultant at Carol Turpen Consulting LLC. When employees have a better sense of control over their finances, they will be happier and function better.
In addition to offering competitive pay and benefits, here’s how HR can support financial wellness at your organization.
Customize Benefits to Employee Needs
Different employee populations will experience different financial struggles, often along generational lines, says Dylan Robertson, SPHR, Client Executive of Employee Health and Benefits at Marsh & McLennan Agency-West. Older employees are thinking ahead to their retirement and may be dealing with unexpected medical costs. Many members of Generation X are taking care of aging parents and worrying about retirement savings. Millennials are often still paying down student loans and caring for dependents (children or parents). Members of Generation Z who are entering the workforce may be saving money for school or paying off debt.
“Start with collecting employee feedback to find out where employees are and how you can support them,” says Cyndi Wenninghoff, PHR, Employee Success Manager at Quantum Workplace. “Develop a strategy, and aim for small changes that make a big impact.” Survey your workforce to determine which benefits they would find most useful. Student loan and tuition reimbursement benefits are becoming more common, for instance. Consider adding an incentive, such as a lowered insurance premium, for participating in a financial wellness benefit or activity.
Communicate Helpful Resources
How you communicate your benefits plan impacts how many employees actually use what’s offered. Some employees may not realize the extent of financial benefits you offer or know how to use their traditional benefits, like a 401(k), to support workforce financial wellness. Create a communication plan to highlight different benefits throughout the year, not just at open enrollment. Share resources that are available to employees as part of their benefits package. Employee assistance plans, for instance, often include financial counseling, while many payroll or retirement benefit providers offer education around financial planning.
Educating employees on benefits and incentivizing their use can spur a stronger return on investment for your benefits package. “Employers don't necessarily have to spend more money on benefits, wellness programs or perks to get the value that they want because, ultimately, it's the employee’s perception of value that matters most,” Robertson says. “They just have to have a really good communication education strategy.”
Raise the Bar on Financial Literacy
Lack of financial literacy is a primary driver of financial stress and insecurity. Worldwide, only 33 percent of adults are financially literate. Being able to stay within a manageable budget or create a plan for paying off debt can drastically reduce employee stress. Include a financial literacy course as part of your learning and development curriculum, or partner with other organizations, like the National Endowment for Financial Education or The Foundation for Financial Education, to offer seminars and resources on various topics relevant to your workforce.
“For a small business that doesn’t have a lot of resources, tapping into a nonprofit that can offer some of these classes is a nice thing to do,” Turpen says. Offer incentives for attending classes, or use contests and programs to help employees stay on track with their financial goals, Wenninghoff suggests. Involving the entire workforce signals that financial wellness is an organizational priority, which empowers employees to take better control of their finances.