The need for financial wellness programs for employees

In today’s changing work environment, employers are required to reconsider how they approach employee benefits. In fact, they need to do this to attract and retain top talents.

Organizations worldwide are now redefining benefit programs to offer the employee more benefits that give the employee and the employer peace of mind. Employers are now considering new and more comprehensive approaches to employee benefits management. Even more importantly, they are rethinking the make-up of their employees and the benefits their employees value most. The normal wages/ salary approach should not be the only way to compensate employees but a more holistic approach that includes considering the employee’s financial well-being.

In Ghana today, most employees barely make it to the next month without relying on friends and family members for financial help. This approach exerts so much pressure on the employee leading to low productivity and employee misbehavior.
In the Job market today, the youth make up the largest portion of the labour force, and these classes of employees have unique challenges and are looking for certain benefits from their employers.

One of such challenges is their financial wellness. In this article, I will try to explore why personal financial wellness programs are important to employees and how employers can integrate financial wellness into their existing benefits schemes to offer employees financial freedom.

In this article, I will attempt to give meaning to what employee financial wellness is.
 
Employee Financial wellness is the employee’s ability to comfortably manage their short-term financial needs while at the same time cultivating the culture of saving for long-term goals. It is imperative to understand that today’s employees are crowded by needs and hence require the skill to manage their scarce resources to achieve financial wellness.

Some of the signs of financial wellness include:

Being able to meet your rent & utility bills.

Able to meet your necessities such as health, and food consumables.

Feeling secure in their current job

Able to maintain a good standard of living.

Having control over their financial situation.

Saving enough for retirement & other financial goals.

Ability to survive three to six months without monthly pay in the event of unexpected health or job loss challenges.

They are not financially stressed up.
 
It is worth noting that your level of income and financial wellness are not entirely dependent on one another. A higher income does not necessarily result in better financial wellness. Financial wellness is about giving your employees the tools and skills they need to better manage their finances.
 
Why is financial wellness important to your employees?:
 
About 70% of today’s employees are youth (millennials) who are struggling with financial wellness largely due to low starting salaries, crippling student loans and huge family responsibilities. These young employees enter the job market with poor financial health impacting on productivity. It is important to understand that, nearly half of the people in the job market today are not financially well:

It is believed globally that, about 42 percent of youth have student loan debt.

According to a Harris online Poll in 2018, 47 percent of millennials have less savings for emergencies.
 
Currently, many employers are recognizing the unique financial challenges employees are facing and are implementing financial wellness programs to help address these challenges.

How Does Employee Financial Wellness Impact Your organization?:
 
Deciding not to invest in your employee’s financial wellness can hurt your
bottom line. The first concern is the financial stress your employees face daily. Most employees spend, on average, two hours a week on their finances at work. Almost 66 percent of employers acknowledge that employees are less productive in the workplace when they are financially stressed. Companies with employees who are stressed about their finances suffer from:

Lost productivity

Higher absenteeism

High employee turnover

On the other hand, employers that invest in their team’s financial wellness reap benefits such as:

Higher productivity

A happier, more motivated workforce

Increased employee engagement.

Higher employee retention rate.

Better ability to attract and hire top talent.

In fact, most employees say that they would move to a business that prioritized their financial wellness.

How Organizations Can Help Employees Become Financially Well:
 
There are many different programs you can put in place to help your employees become financially well. Some ideas for high-impact financial wellness benefits include:

Educate employees: Most employees want to participate in a financial wellness program but don’t fully understand how it benefits them in the long term. Furthermore, your employees may suffer from analysis paralysis when it comes to a time to pick a plan. Providing educational materials and guidance to help them select the best option can help increase enrollment and keep your team financially healthy.

Provide access to financial literacy: Nowadays there are several mobile apps your employees can use to increase their knowledge of personal finance. Providing employees with access to financial literacy helps empower them to take control of their finances.

Market benefits to employees:  Allow employees to fully understand the benefits available to them and help them pick the benefits that are best for themselves and their families. (Insurance, financial plans, etc)

Offer budgeting tools or workshops: Help Employees with workshops and tools to appreciate how to create and manage personal budgets. Providing access to personal budgeting templates or doing lunch-and-learning on how to create a budget are all great options.

Implement a student loan assistance program: Student loans are one of the biggest sources of financial stress for more than half of the youth. They are always worried about not being able to pay back their student loans. Employers can offer them financial assistance to support them in paying off the loans.

Provide access to financial Advisors or coaches: Many of your employees could benefit from the guidance of a financial planner or coach, but don’t have the funds to pay for one themselves. Offering a call-in hotline or access to a dedicated advisor can give employees peace of mind knowing they have a finance expert to turn to for advice.

Conclusion:
 
In today’s complex financial world, helping your employees navigate personal financial challenges is the sure way to go. It allows you to align your employee’s financial wellness with the long-term strategic objective of your organization.

The writer is an experienced Insurance Practitioner and Marketer.