Why Financial Wellness Programs Make Cents

By Kerry Pivovar:

Do you have an emergency fund that will cover 6 months of expenses? How about a healthy retirement account ready for when you need it? A zero-balance credit card statement?

Unfortunately, the majority of Americans cannot answer ‘yes’ to one of these questions, let alone all three. Chances are, your employees cannot answer these firmly either. Financial dependence is suffocating the American workforce, but not just at home. Nearly one in three employees report that issues with personal finances have been a distraction at work. Employers are losing money in the way of productivity and profitability due to money problems weighing on employees’ minds. Just a few stats can raise anyone’s blood pressure:

• Nearly 6 in 10 Americans don’t have enough savings to cover a $500 or $1,000 unplanned expense.
• The total student loan debt today is $1.31 trillion.
• The average American household debt is $5,700.
• A good rule of thumb is to have 10 times your final salary in savings if you want to retire by age 67.

“Financial stressors are not only negatively impacting employees, but are costing employers. Stressed employees are found to be less productive, take time off from work to deal with their finances and are more likely to cite health issues caused by financial stress. These findings are concerning and potentially significant for companies looking to evaluate the return on investment of a financial wellness program.”

-Kent E. Allison, Partner & National Practice Leader

Why a Financial Wellness Program?

Employers are beginning to acknowledge the link between financial stress and the mental and physical health of the employee. Sick days, lack of focus and an overall heightened stress level cost a business in more ways than one. It makes sense for smart companies to accept the issue and do their best to tackle it. Addressing the financial health of individual employees makes sense to the employer as much as the employee.

Money worries are costing employers up to $250 billion. Learn why Financial Wellness Programs make sense: Share on X

Employees reported spending approximately 150 hours annually of their work time worrying about money. On a total US wage bill of $5 trillion, this could be costing employers up to $250 billion in lost wages each year. The survey also finds that employees with access to financial wellness have over twice the job satisfaction and higher levels of trust than those without access. Increase employee engagement with a different type of benefit – one that makes a huge difference the overall life of the employee- not just work-life.

Stress is a factor in five out of the six leading causes of death— heart disease, cancer, stroke, lower respiratory disease and accidents. An estimated 75 percent to 90 percent of all doctor visits are for stress-related issues. Reducing sick days and doctor visits can significantly reduce the cost of another work benefit – healthcare.

What is a Financial Wellness Program?

A Financial Wellness Program is a company-organized program offering services ranging from seminars and workshops all the way to free credit monitoring and access to certified financial planners. The goal is holistic financial literacy with a hope of improved behaviors and habits. While not brand new to the HR space, Financial Wellness Program are beginning to gain traction as an essential benefit.

How to Start a Financial Wellness Program as an SMB

The recently-released eighth annual Employer-Sponsored Health and Well-Being Survey from the National Business Group on Health and Fidelity Investments found that 84% of 141 large- and mid-sized companies surveyed now have financial wellness programs, up from 76% a year ago. Personalized financial planning could refocus employees back on their work. However, not all companies have the time and resources to implement a formal program.

Small budget? Learn how companies of any size can establish a Financial Wellness Program. Share on X

SMB companies are missing out on the many opportunities to offer a version of this benefit with minimal cost and setup. If you have a hunch that part of your staff could be in the less-than-financially-independent majority (and interested in improving their status), these following steps can be used to catapult an FWP within the month.

Check out these great benefits you didn’t know you were offering.

Set a Goal

Set a goal for your Financial Wellness Program like:

• “100% enrollment in Company Retirement Program” or “Adding a Financial Wellness Program officially to the list of advertised benefits.”

Find a Financial Wellness Captain

There’s always one employee who has her shi*t together when it comes to money. Changes are, that person likes to talk about how well she’s doing too. Put her knowledge and experience to good use by formalizing her into the Captain of the project. Have her pull any books, tools and other resources she uses to share with the team. This person is there for the basics* and can help get the team onboard and stay on track.

*As great as your Captain is doing in her personal finance, always vet unqualified advice and keep the investing advice for a professional.

Survey Your Employees

There is no point starting a program in which there will be no participation. Survey your team to learn if this is a viable and positive idea. Use free survey tools to gather interest from your employees. No personal money data needed:

• Does personal finance cause you stress?
• Would you be interested in workshops, classes, workshops and/or guidance in personal guidance on behalf of Company ABC on company time?

Start the Program

Now that you have a goal, a captain and employee buy-in, you have officially established your Financial Wellness Program. Start with communication of this to your employees and explain what they can expect coming up.

Start a Resource Library

• A one second Google query can crowdsource you the ‘best personal finance books’ out there. Order a few and display them in the office’s designated Personal Finance section. Urge employees to check out a book for a month, or even to take a reading break in the afternoon.
• Pool together and share online tools for budgeting and spending for your employees to explore and set up on company time.

Get Back to Basics: Benefits

• Been awhile since talking about the benefits package all employees receive? Check on enrollment numbers in the health plans, IRA or 401k plans or any other underutilized benefits.
• Send out an email every quarter or year asking employees if they wish to increase their contribution %. Chances are employees set and forget these numbers without taking into account raises or other life events.
• Think about an automatic Retirement Enrollment on the employee’s first day.  This encourages them to save for retirement without thinking about it. Automatic enrollment is quickly becoming the norm in 401(k) plans, with 67% of plans offering it.

Consider adding Student Loan Repayment to your comprehensive benefits package.

Offer a Class, Seminar or Workshop

• Start with the company through which you have your retirement plan. Ask if they would be willing to send a rep to explain the benefit to your employees. Chances are they will do this willingly and happily, which means free advice and guidance for your team!
• Look for ‘Lunch n’ Learn’ opportunities from local Financial Planning firms. These companies typically seek out chances to come talk to your team over lunch and do not charge a fee. (Yes, they are looking for customers, but hey, free advice in the meantime!)
• Hire a Certified Financial Planner and schedule a time during work hours to talk to your team.

Wash and Repeat

• You have now officially established a Financial Wellness Program at your SMB. Repeat steps 5-7 every quarter to not let the plan fall by the wayside.
• Have you met your goal?
• Did a ‘Lunch n’ Learn’ go well? Ask your team for other suggestions and other avenues to explore!

Financial Health for Company and YOU

Helping to remove a large stress area in your employee’s lives is a benefit everyone can get behind. Increased productivity for you and a brighter outlook for them. Even if the results aren’t immediately quantifiable, once you implement a financial wellness program for your employees, they will be happier and more productive. They will worry less about their home finance and more about their work.