Workplace Well-being

What is an employee financial wellness program?

Help your workers to manage their money with an employee financial wellness program and see an increase in productivity and staff retention.

Stevie Carpenter

Published on 

March 14, 2023

Updated on 

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Businesses are increasingly focusing on employee well-being, offering flexible hours and extra benefits to boost staff retention. But what about financial well-being? An increasingly important issue, given that the percentage of Americans considered to be financially healthy decreased from 34% in 2021 to 31% in 2022.

Image sourced from finhealthnetwork.com

If your workers are struggling to manage their money, you might consider launching an employee financial wellness program. In this post, we’ll explore exactly what that means, take a look at the benefits, and show you the best ways to support your staff.

 

What is an employee financial wellness program?

Financial well-being is the ability to manage money properly, and an employee financial wellness program aims to give your workforce that ability through education and advice. Such programs go far beyond the standard retirement planning offered by most organizations.

Employee financial wellness programs help employees handle their day-to-day finances, as well as plan for the future. This may include online learning, personal finance counselling and mentoring, financial education workshops, and partnerships with companies that specialize in financial planning.

Workers are encouraged to set financial goals and create realistic plans for achieving them and learn to protect themselves against financial risk. They might want to manage credit and debt, save for a major life event, seek advice about investment, or get help with taxes. They’ll also learn to get the most out of their paychecks and use all the available employer benefits.

The program is designed to ensure that employees understand how their finances work, which reduces stress and helps them feel more confident. It should provide a reliable resource for financial information, as well as a confidential source of advice.

 

Benefits of financial wellness programs

Financial wellness programs bring a raft of advantages, not just for the employees themselves but also for the success of your business.

Improves employee financial habits and mental health

Employees face financial stress caused by turbulent economies and rising living costs, which can lead to further mental health issues. Financial wellness programs give your employees confidence in understanding and managing their money, helping to reduce stress and anxiety.

Financial wellness programs also encourage employees to develop good financial habits, such as setting spending limits and avoiding risky behaviors like getting into debt and using loan sharks.

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Helps employees take action towards financial success

As well as educating employees on day-to-day financial management and household budgeting, financial wellness programs can help with things like improving their credit score, applying for a bank loan or mortgage, and getting ready for retirement.

You might show workers how to save a percentage of their paycheck each month, set up automatic payments to make sure their bills are paid on time or offer advice on paying off a student loan.

Enables employee growth through financial upskilling

Employee financial wellness programs can include training on the use of tools such as budget trackers and spending alerts. As employees become familiar with these tools and processes, they develop extra skills in financial competence and computer literacy.

Upskilling your workforce is great for business and rewarding for employees. A diverse skillset is especially useful in small businesses where employees may have to wear several hats. So, encouraging high-potential staff to learn business-specific skills such as inventory management or how to use online accounting software will not only benefit them professionally but could also help your business run smoother. 

Educates employees about investments

With so many investment options available, first-time investors will need guidance to understand how the various products work and which option is best for their individual needs. A financial wellness program should include investment mentoring, as well as teaching employees how to assess and manage risk so that they feel confident in their investments.

Helps employees with their taxes

Even people who are good at money management can struggle with doing their taxes. Employee financial wellness programs provide tax advice and education, which reduces the risk of errors and penalties and ensures that workers are aware of the deductions and tax breaks available. You might offer personal coaching or a discount on using an independent financial advisor.

Increases productivity and satisfaction

Employees who constantly worry about money or who have to take on a second job, will be distracted and less productive at work. Plus, they may struggle to afford healthy food options or healthcare, leading to absenteeism. Financial wellness programs will alleviate these issues, and also demonstrate that your company cares about employee well-being—which increases satisfaction.

Image sourced from talentlms.com

 

How to support employee financial wellness

So, how do you create a financial wellness program that fully supports your employees? Let’s find out.

Ensure benefits meet employees needs

You’re probably already offering traditional employee benefits like 401(k) plans and healthcare, but it’s important to ensure that the benefits are relevant to your staff’s needs. For example, as well as encouraging retirement savings, you can offer short-term benefits that help people right now.

Younger people may want assistance with paying off student debt, while employees with young children would appreciate help with childcare costs. Employees with different levels of financial understanding will require different levels and styles of education.

Offer regular financial wellness coaching and mentoring

As well as providing self-serve information or an education platform, it’s important to offer 1:1 coaching and mentoring for personalized, confidential guidance. This can include financial therapy, which deals with the emotional side of money management. You can use video conferencing to reach remote staff.

Through financial coaching and education on essential skills and tools, your business can encourage financial wellness. For example, you can introduce workers to budgeting, debt management, or provide them with investment advice personalized to their needs. 

Providing your staff with the necessary tools and skills to manage their personal finances will set them up for success and could have a long-lasting effect on their future. 

Start an employee discount program

An employee discount scheme can be a great way to help staff make savings and boost job satisfaction. But if the discounts are for things your employees don’t need or want, you’re actually encouraging them to waste money!

Make sure you partner with brands that your employees like to use (you can find this out with a survey). These can include national chains and local services. It’s also important to offer deals that they won’t find anywhere else.

Image sourced from files.consumerfinance.gov

Establish meritocracy

In a workplace meritocracy, employees are judged by their efforts, skills, and performance. When they are recognized for hard work and good ideas, they’re promoted to higher positions. So, employees who work hard will have the opportunity to earn a higher salary and unlock benefits or bonuses.

By using the right HR software solutions package you’ll be better placed to establish a meritocracy within your company. You can track employee performance, manage your employees’ goals, and grow their skills to help them thrive. 

Meritocracies also give everyone the right to express opinions and ideas, and to share them openly—so ask for feedback about your financial wellness program or schedule regular one-to-one meetings.

Screenshot taken from sage.com

Create an employee mortgage program

Obtaining a mortgage is one of the biggest financial moments in someone’s life, so it’s worth reducing employee stress by adding this to your financial wellness program. As well as offering advice on how mortgages work and how to apply, you could set up a scheme where employees put a fixed percentage of each paycheck into a designated account where they can save for a mortgage.

Include healthcare coverage for their specific needs

Most employees expect their employer to provide health insurance, but some companies offer more than others—and it’s good to tailor the coverage to their individual needs. For example, you might include eyecare if your employees are constantly looking at computer screens. You could also offer help with fertility treatment, gender reassignment, or coverage for children or elderly dependents.

Get started with your financial wellness program

As we’ve seen, an employee financial wellness program helps to reduce stress, increase productivity, and improve staff retention. By tailoring the financial coaching and benefits to individual needs, you can ensure that every employee has the skills and tools they need to manage their money better—whether it’s getting out of debt, saving for retirement, or making smart investments.

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