By helping employees manage money-related stress, financial wellness programs can improve productivity and reduce turnover
Employee stress about money, particularly among millennials, is on the rise. This strains companies, too, because it often leads to distraction, lost productivity and staff turnover. The 2021 EY Wellness Barometer Survey found that 65% of employees are stressed about their finances due to the pandemic, costing US employers a total of $4.7 billion per week in lost productivity.
Effectively addressing these stresses through financial wellness programs can help reverse the trend. An often-cited report by the U.S. Consumer Financial Protection Bureau found that every dollar spent on employee financial wellness brings a return on investment of three dollars. And the cost of providing access to financial planning professionals for employees may be just 1% of the cost to provide access to health care professionals through group medical insurance.
But to be successful, these programs require going beyond introducing new or improved benefits, such as matching retirement contributions, profit sharing, and maternity and paternity leave. Crucially, any wellness program must identify, understand and address employees’ particular financial challenges.
Employers must recognize that one size does not fit all, and different generations have very different concerns. Perhaps the most specific worries about financial security are carried by millennials.
The Millennial challenge
The average cost of an undergraduate four-year degree program in the United States is $35,720 per student per year, having tripled over 20 years with an annual 6.8% growth rate according to Educationdata.org’s average cost of college and tuition.
Educationdata.org also reports 43.2 million total student loan borrowers have an average debt of $39,351, with 35-year-olds carrying the largest average balance at $42,600.
How employee wellness programs help both them and your business
With these issues facing the fastest-growing workplace demographic, managing financial stress becomes a business imperative.
Employers and employees both have a lot to gain through programs that support workers as they confront various financial stresses at each stage of their lives. With relatively minimal investment, companies can take measures to understand their workforces, what they need, and how best to address those needs and bring peace of mind.
A well-planned and executed financial wellness program, including webinars, short videos to promote financial education, a planning website and one-on-one financial counseling, can significantly reduce stress and employee turnover.
By easing financial concern, companies can reduce employee absenteeism, improve productivity and ultimately support the bottom line.
Four key steps to improving employees’ financial wellness
1 Analyze your current workforce to understand generational differences.
2 Analyze HR outcomes to determine the level of current financial stress. For instance, you can examine turnover rates, health care costs, absenteeism and job performance ratings.
3 Reconsider your communication strategy to help employees better appreciate, value and utilize benefit plans, thereby improving retention.
4 Consider the value of building a financial wellness program around these new findings.
Because worker stress about money strains companies, too, financial wellness programs benefit both employees and employers.