Whether obvious or not, many employees are carrying a great deal of financial stress, making financial wellness programs not only important, but in our opinion, as necessary as providing basic benefits such as life and disability insurance. The toll of this financial stress is staggering on the employees and can be illustrated clearly when looking at the statistics.
The “Report on Economic Well-Being of U.S. Households in 2015” found that 46% of adults either could not cover an emergency expense of $400 or would cover it by selling something or borrowing money. On top of this discovery, the 2016 Employee Financial Wellness Survey found that out those who carry credit card debt balances, 29% find it difficult to meet their monthly minimum payments. When you include employees who still are paying back student loans, that aforementioned percentage is even higher. Not only do these situations sometimes lead to poor financial decisions, such as taking loans from employer-sponsored retirement plans to pay bills, but this stress could mean lost productivity and increased expenses for the company.
So how do you alleviate this stress and what is the role of the employer? Financial wellness programs, helps employers lessen financial stress in the workplace, increase retirement readiness, strengthen workplace culture and empower employees, while at the same time, illustrating the employer’s desire to look out for the best interests of their employees. The goal is to create a foundation for financial wellness by helping employees and their families establish smart money habits, increase savings, and find an approach to saving that fits their lifestyle and values.
Every business owner knows that their employee benefits are expensive but vital to hiring (and retaining) the best employees. However, many employees do not realize the cost or the importance of the benefits. Therefore, integration of employee benefits is vital to any financial wellness program. Think about it; an employee is likely relying on their employer’s retirement plan, life insurance, disability insurance, health insurance and other benefits to reach their goals while protecting their family. So, it is logical to educate employees about these benefits and, more importantly, the role these benefits play in their overall financial well-being and total compensation package.
What does a financial wellness program cost? While some financial wellness providers may charge a fee for this service, we have found that providing this as a complementary service allows us to give back to the community and enrich the lives of many. In fact, the result has been “win-win”. The employee wins by receiving objective financial education (and hopefully reduced stress) they receive at the workshops. The employer wins because employees appreciate the program, are less-stressed, and more productive and loyal.
If you believe your company and employees would benefit from a Financial Wellness Program, consider contacting your financial advisor for more information.
Click here for a free download of the Foreword (written by NFL Legend Ronnie Lott) and Chapter 1 of The Art of Retirement written by Gary Williams, CFP®.