As an employer, you want your employees to be around for the long run — and with today’s competitive labor market, that can be a challenge. Offering financial wellness programs is a way to boost employee loyalty to your business while also ensuring your staff are set up for financial success.
First, let’s define what we mean by financial wellness. In the simplest sense, it can be defined as an individual’s ability to develop an understanding of their financial health and the capability to develop strategies to balance both short- and long-term goals in an effort order to feel secure. Much like health wellness programs promote the importance of maintaining a healthy lifestyle through a prevention-based approach and incentives to improve diet, increase physical activity, and cease smoking, financial wellness programs can help employees prevent financial bumps in the road. These programs focus on improving financial practices related to spending, saving, and investing.
As workplaces become more diversified, it’s increasingly important to tailor wellness programs for individual employees’ unique financial circumstances. After all, the program should really be about employee needs — not the employer.
But it can be difficult to gauge the financial challenges of your employees, and it’s unlikely they broadcast their struggles. That’s why an important first step to choosing and building a financial wellness program is to conduct an assessment to better understand the issues your employees are facing.
Consider using a survey to do the heavy lifting of gathering information. You may find that part of your population carries a significant student debt burden, while another group may be confused about life insurance policies or when to take social security. Armed with that knowledge, you’ll be able to segment your audience and tailor your program to meet your employees’ distinct needs.
In action, financial wellness programs often take a multichannel approach. A mix of on-site education meetings, online learning modules, and on-demand resources and calculators provide myriad ways for employees to seek help and learn through the process. Financial tips circulated via a company’s intranet or newsletter is one simple way to reach employees. Access to financial professionals who can provide personalized assistance can be a great benefit for employees, but as plan fiduciaries, you must identify and analyze any potential conflicts of interest first.
Simply offering a financial wellness program just to check the box and say you tried isn’t enough.
But none of these strategies will be successful without establishing a supportive environment and promoting the program to employees — simply offering a financial wellness program just to check the box and say you tried isn’t enough. Leveraging third parties can help minimize the time your organization spends selecting and building out the program while still maximizing value.
Often, the money and resources needed to build an effective financial wellness program are negligible compared to the benefits you and your employees receive. Various performance indicators can help measure success: improvements in employees’ debt levels, credit scores, and retirement readiness are all signs of a quality program. A reduction in absenteeism and increased workplace productivity and morale may also be noticeable, since employees should be less stressed about finances and less apt to tend to financial matters during work hours. Lastly, financially secure employees are more likely to retire on time which can lead to lower healthcare costs for your business over time.
Financial wellness continues to generate significant buzz — buzz that’s unlikely to die down anytime soon. For good reasons. If you haven’t already, now is a great time to show employees you value their contributions and loyalty by helping them take the steps necessary to secure their financial futures.
Want to learn more about financial wellness? Contact us today.