First things first: what exactly is financial wellbeing? Well, this concept can be defined as the state of being in control of your financial situation, both present and future, and having the financial freedom to make choices that allow you to enjoy life. As opposed to living paycheck-to-paycheck and constantly stressing about money matters, financial wellbeing allows you to have peace of mind in knowing that you can afford to pay your bills, save for the future, live comfortably, and have some fun!
Unfortunately, though, many people in the workforce still don’t feel financially secure, because if it wasn’t already obvious, financial wellbeing is about more than just receiving a paycheck. According to recent research by TalentLMS, Enrich, and Tapcheck, due to money-related stress, 49% of employees have experienced mental health struggles, and 45% have physical health issues.
Besides the paycheck, a number of measures can be taken by HR teams and company leaders to help their team feel super confident and secure about their money situation—and these measures would fall under the company’s financial wellbeing benefits. 68% of employees are more likely to stay longer at their current job if offered financial wellness benefits, so it goes without saying that companies need to prioritize employee financial wellbeing, right? Before we get into how they can go about this, let’s get into the whys…
Why supporting employees through financial wellbeing benefits should be essential, not optional:
- Let’s start with the obvious: it's just the right thing to do! We spend a significant portion of our lives at work, and companies have a responsibility to take care of their employees' holistic wellbeing, and this very much includes their financial wellbeing.
- Next: businesses hardly succeed when the people that make things happen are unwell and unhappy. By providing financial support, companies can help ease the financial stress that employees may face, enabling them to stay more focused and productive.
- Finally: investing in employee financial wellbeing is literally an investment in the company's future! When employees feel secure about their finances, they're more likely to stick around and contribute to the company's success in the long run. This saves companies time and money spent on hiring and training new staff.
Some tried-and-true methods:
Moving on, let's talk about the ways that companies can support employee financial wellbeing. As it turns out, there are quite a few benefits and methods that can be used to help employees achieve financial stability and security. While the methods are plenty, we’ve rounded up some of the best.
- Financial education and counseling: Providing financial education and counseling is one of the most effective ways for companies to help their employees improve their financial wellbeing. This can include offering workshops, seminars, and one-on-one counseling sessions on topics like budgeting, financial literacy, debt management, investing, and retirement planning. It can also look like giving them free or discounted access to a financial planner or financial planning tools.
- Retirement plans: Offering a retirement plan, such as a 401(k) or pension plan, is another way that companies can support their employees' financial wellbeing. These plans allow employees to save for retirement and often come with employer contributions, which can help employees reach their retirement goals faster.
- Help where you can: In addition to the standard practice of boosting salaries, employers can assist their workers with big expenses that can throw off their finances. For example, childcare costs can really put a damper on someone's wallet and impact their overall financial health. One way to help is to provide options for working from home or offering some paid time off during tough times. It's also worth exploring group discounts on expenses and partnering with free or reduced-cost resources.
- Healthcare savings accounts (HSAs): depending on availability in the country you operate in, HSAs are tax-advantaged accounts that employees can use to save for medical expenses. By offering HSAs, companies can help their employees save money on healthcare costs.
- Ask and listen: Companies can take a proactive approach by actively listening to their needs and taking steps to address them. This can look like offering flexible work schedules and benefits such as dependent care, as well as organizing educational opportunities, workshops, and events that can raise awareness on financial wellbeing and help build team culture.
- Offering loans: Companies can consider offering loans to their employees as a way to support their financial wellbeing. These loans can be structured as employee assistance programs or emergency funds, providing employees with access to low-interest loans during times of financial hardship. This can help employees manage unexpected expenses or bridge financial gaps without resorting to high-interest loans or credit cards.
- Don’t overlook the small stuff: It’s in the little things too! For instance, providing reimbursement for gym memberships, offering free or subsidized lunches, and providing discounts on products and services can all go a long way. Collectively, the small stuff can have a big impact on their overall financial health.
What are some companies actually doing to support the financial wellbeing of their employees?
Now, let's take a closer look at some real-life examples to get you inspired:
- Mastercard: Mastercard offers its employees access to financial counseling and education services through its Financial Wellness Center. This comprehensive program equips employees with the necessary resources and tools to manage their finances effectively, including budgeting tools, debt management advice, and retirement planning resources, all of which enable employees to improve their financial literacy and make informed decisions about their finances.
- Microsoft: Microsoft offers its employees a successful financial wellness program called Live Well 365. In addition to comprehensive insurance plans and health tips, the program includes a dedicated portal with a thriving blog that covers all-things financial education. This program also offers a range of health, fitness, and financial wellness benefits, such as financial planning tools, retirement planning resources, and access to financial advisors. Through this program, employees gain the knowledge and skills necessary to achieve financial security and stability.
- Google: Google offers a range of financial wellness benefits to support them. These benefits include a retirement plan with employer matching contributions, access to financial advisors, and free financial planning seminars. This program is designed to help employees develop a solid financial plan and work towards achieving their financial goals, by empowering them to take control of their finances and make informed decisions about their future.
- Vinovest: Vinovest offers its employees a unique opportunity to learn about the fundamentals of the stock market and wine-investing market as part of their onboarding process, enabling them to diversify their investment portfolios. Upon completion of the operating program, employees receive $1,000 in their company portfolio, which opens the doors for them to invest in high-quality wines that can increase in value over time.
- Prudential: As a financial services company, it's no surprise that Prudential offers a variety of financial wellness benefits to its employees. These benefits include retirement planning tools, student loan repayment assistance, and access to financial counseling services. Through these resources, employees can develop a solid financial plan that takes into account their long-term financial goals and objectives. They can also get support in managing their finances effectively and reducing financial stress.
Financial wellbeing is an essential aspect of overall wellness, and companies are taking notice. By offering financial education and counseling, retirement plans, health savings accounts, and more, companies are helping their employees achieve financial stability and security.
With the right support, employees will not only feel empowered to take control of their finances, but they’ll also feel safe and secure, and live their lives with significantly less stress around money matters, which is a state of mind that everyone deserves to be in!
Featured image sourced from canva.com