Most everyone knows what wellness programs are designed to do for the body—help you get and stay more physically fit and be more proactive for your personal health. But what about financial well-being? Do your employees suffer from the financial flu?
Money worries have become a significant distraction for employees during working hours. Not Facebook, not chain emails, not weight loss—worries about money. Although many U.S. businesses have recovered from the Great Recession, many who work at those businesses haven't.
The Society for Human Resource Management says those worries are now a huge drain on employee productivity. According to SHRM, seven out of 10 human resource professionals said that personal financial challenges have an impact on their employees' performance. And nearly 40 percent of employees are facing greater personal financial challenges now compared with the onset of the recession in 2007.
And that's just the HR professionals who are attuned to the financial difficulty their employees face. Others could be clueless. The survey also uncovered this alarming fact: Employees were 60 percent more likely to tap their retirement account for a loan than in previous years, and 44 percent are more likely to ask for a hardship withdrawal from retirement savings.
In today's economy, many of your employees are experiencing financial distress. Employee financial distress costs employers:
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Increased absenteeism
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Lower productivity
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Increased turnover
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Decreased employee health
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Diminished work environment
Even in a good economy, individual financial wellness is important. For employers, the well-being of employees is a critical component to success. Today, the financial distress employees experience is yet one more way a bad economy impacts your business. When workplace outcomes can be improved, everyone benefits. The benefits to employers are definitely worthwhile, leading to enhanced productivity, decreased absenteeism and improved employee health and preventative care/lower health care costs.
Typically, financial wellness programs offer an array of proactive financial planning tools that help you better manage your money in the short term (through budgeting, credit counseling and the like) and in the long term (retirement planning). Even if offered as an employer benefit, employees should weigh these three factors: the services offered, confidentiality, and their ingrained financial habits.
Establishing and maintaining healthy spending and saving habits is as important to your employees' wellbeing as proper nutrition and regular exercise. You can achieve financial wellness—the balance between living responsibly today and planning wisely for tomorrow. A good financial wellness program should include these initiatives:
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Help your employees build awareness of their financial situation
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Provide your employees education for establishing financial goals
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Empower your employees to change their behavior and achieve their goals through informed choices in the financial planning process
Other good financial wellness programs in the market include telephone counseling and web-based programs. You may want to consider a more broad-based approach by offering a menu of items including these and other services, such as an EAP product, ID theft protection, tax and legal services, financial advice and more.
For many companies, employee financial wellness is the missing piece to maximizing the effectiveness of existing wellness programs and fully containing health care costs—not to mention fostering a workforce of healthier, happier and more productive employees who are engaged and empowered.
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