Financial Wellness Benefits: Why You Should Care?
A penny saved is a penny earned. –Benjamin Franklin
The idea of providing financial wellness benefits has always been a prime matter of concern for employers. Employees are worried about their money and roughly half are stressed about their finances and have said that their retirement plans will not be enough to support them after retirement.
Consider the 401K plan, which is also a financial benefit existing way before than other benefits that organizations opt for.
In the wake of the Great Depression, employers started to add benefits package not only to retain and attract best talents but also in order to support their employee's personal needs and goals. This trend of offering benefits has continued in the 21st century and will be existing in the coming eras as well.
In this present era, the number of employees that join in is millennials and 21% of them has said that they want help with their saving which will help them build a secure future.
It has become essential for employers to include a program which focuses on employees' finances. Your biggest investment is in your employees, and by giving them the tools for financial fitness, you are directly boosting your bottom line.
But before jumping in to provide the necessary financial wellness benefits, it is vital that you educate your employees. Educating in such a way that they have a strategic approach towards their finances which will help them in the long run.
As employees care about their health and fitness, they have similar awareness regarding their finances. And they feel that there is a certain need to maintain balance in between these for a prosperous future.
In this article, I will be talking about the financial benefits that your employees need and what they expect from you as an employer.
Financial Wellness Benefits that your employees want:
Before delving into the financial wellness benefits let us have a look at a few statistics:
42% of employees say it’s likely they’ll need to use money in a retirement account for expenses other than retirement.
54% of employees want to make their own decisions, but want someone else to validate that they did the right thing.
20% of Employees would Trade Pay Raises for Better Health Coverage.
5% of employees would like to retire when they want to without worrying about their finances.
Keeping the statistics in mind, let us dive into the benefits that you could provide to your employees.
1. Retirement Plans- Planning for the future:
Saving up for the future is an essential plan that every employee includes in their to-do-list. A future where they would not want to worry about their finances. There are numerous plans that help employees to make savings and strengthen their financial planning.
One such plan includes 401(K) plan, where it is sponsored by an employer and employees save and invest a piece of their paycheck before taxes are applied.
While this plan lets your employees save up but it has plenty of restrictions and in most cases, they cannot tap into employers contributions immediately. On top of that, there are complex rules about when an employee can withdraw money and costly penalties for pulling funds out before retirement.
While these plans help your employees in saving up money but they have to follow very stern rules when it comes to withdrawing money. That can be a pain during an emergency.
But rest assured, the retirement plans are much more effective and you need to educate your employees about it. Furthermore, providing retirement plans as benefits will make their future more secure.
2. Student Loan Repayments-Fending off the debts:
Your young employees are the backbone of your organization’s future. They are enthusiastic, innovative, hard workers and can come up with different ways to complete their work.
But most of the employees these days are often stressed regarding their financial status. It is mostly because of the student loan debt which clearly impacts their productivity and health in the workplace.
As a responsible employer, you can facilitate a loan repayment program for these employees. This program is quite simple, here as an employer you will only need to contribute a fixed amount each month towards an employees student loan principle that would help lessen their financial burden.
The amount that you would like to contribute can be fixed according to various factors that may include the size of your workforce, your turnover and future company plans.
This will not only help them in reducing their debt but in return as an employer, you are more likely to get committed employees in your organization and thus pave a way towards creating a healthy company culture.
3. Flexible Paydays:
The road to reducing debt and meeting ends meet can be long. Employees with a long list of debt can find it really difficult to spend on basic needs. But as an employer, you can take up some steps to countermeasure this problem and reduce their stress.
You can let your employees choose when they get paid ensuring their financial wellness. Employees who are struggling financially will benefit a lot from flexible paydays. The biggest win for them will be able to avoid late payday loans.
With flexible paydays, you will not only keep your employees happy but also pave a way for them to tackle their daily needs.
4. Personalized Financial Advice Programs:
Companies are now focusing on programs which give their employees more in-depth planning about their finances. Access to information and financial advice in accordance to an individual’s situation and goals are increasingly must-haves.
Employees have more challenges to face outside of just saving for retirement. Teaching employees how to pay down debts is one of the smart financial moves which are critical to a financial wellness picture.
Creating a good financial advisory program focuses on the key facts about how to strategize it and how it will really help your employee.
For a financial advisory program to work, you need to have a detailed structure on what you will put in front of your employees and how it will ultimately affect their future plans in a positive way.
Advantages of a Financial Wellness Benefits:
With having a comprehensive and tailor-made financial wellness program not only will the employees get help from it but as an employer, you are bound to have some advantages as well.
Few of them are listed below-
1. Improved employee productivity:
One of the top advantages that you will get is that there will be an increase in employee productivity in your organization. A financial program that offers budget counselling, debt reduction programs, student loan support along with basic knowledge of banking will fend off the distractions it creates. And it will also help to reduce personal financial hardships.
Financial wellness programs reduce the disruptions of the employee’s time from concerns over debts, missed payments and poor credit scores.
2. Increase in Employee Satisfaction:
Employees have reported greater professional and personal satisfaction when they have access to programs that let them set and achieve personal financial goals. Which mostly includes contributing to an investment plan, building an emergency fund, preparing for holidays and vacations and much more.
An employee who is prepared for unexpected financial emergencies is much more likely to exhibit engagement at work without worrying about their finances.
3. Greater employee retention:
With the help of financial wellness program, you are more likely to offer employee perks which help them in stable planning of their money. This will not only help them in the long run but will also help you in retaining your prized assets.
Employees are more likely to stay in your organization if they see that they will have a greater helping hand with their finances. This increases retention and improves your company culture as well.
4. Strong Employee Recruitment:
In an era where competition is high and job hopping a common trend, employers have to provide all the benefits and perks to attract and keep their best talents. Benefits matter to a great deal for the millennials who understand the value of good health insurance and healthy financial stability.
Organizations value potential candidates through their willingness to provide support to employee’s personal financial life. This, in turn, makes the millennials feel valued in the organization they work for and a common job requirement that they look out for. Thus, leading to higher chances of recruitment in your company.
5. Reduced absenteeism:
With the rise of inflation rates, the cost of living has increased a lot due to which employees find it difficult to reach ends meet even if the job is a well paid one. This happens due to the fact that employees do not often have a well planned financial strategy for their spendings. Thus leading to stress, anxiety and depression.
Employees might opt for secondary jobs to have some extra money. This might affect their presence in their main job leading to an increased number of absentees in your organization. This can be a major problem for you and the company.
However, you can change this situation by helping out your employees in providing them with financial wellness lessons. These lessons will help them to device out an efficient budget for themselves which will, in the long run, help them to avoid their financial woes. Thus, omitting out the need for another job hence reducing absenteeism.
Summing it up:
Financial wellness benefits is a program that you must include in your organization. We have already talked about what can be the benefits and what are the advantages you get out of it. Structuring such a program can be time-consuming and might take effort.
But with so much in line, taking up time to look after your employee's finances will not only make them happy and satisfied but will also give them a feeling of pride that their organization cares for them.
Furthermore, this will give a perfect example to others that your organization has an excellent company culture and a workforce that works with positivity.