Employees are worried about their finances. They worry about them in the evenings, on weekends, and during working hours. Plus, with the increased stress caused by the pandemic, it’s no secret your workforce could use some help.
More Than Meets the Eye
Many employees struggle with cash for emergencies. In a recent 2020 study, they found that 47% of respondents had difficulty finding $250 for emergencies1 and had to resort to credit instead. While millennials are saddled with loan debt, members of the “sandwich generation” are burdened with dividing their limited resources between themselves, their children, and their parents, while still trying to prepare for their own retirement.
Each employee demographic is struggling with their own financial challenges, which is why a dynamic financial wellness program needs to span the generations and provide potential solutions for each unique situation.
How can employers help?
Oftentimes, one of the major problems is a lack of access to financial literacy resources. And it’s a problem that employers can help solve by providing financial wellness programs for their employees. Here are five advantages of a financial wellness program:
- Engagement. Are your employees going through the motions or are they creating and sticking to their financial plans? Financial worries can increase employee stress which leads to distraction at work. It has been shown that offering a financial wellness program breeds loyalty and focus. Six in 10 workers say they are more committed to their employer and more productive at work when they have a financial wellness program.2
- Lower health care costs. Financially unhealthy, stressed employees frequently have higher health care costs. Financially stressed employees may increase corporate health care budgets, as their health care costs run 46% higher than non-stressed employees.3 Lowering overall health care expenses tend to lead to lower employer costs.
- Fewer incidents of “presenteeism.” “Presenteeism” is a term that describes lost productivity by employees who are physically present, but not working. They are distracted by outside work stressors. This stagnant time costs employers in lost wages, lost productivity, and reduced job performance.
- Retention and attraction. As stated, employees say financial wellness programs demonstrate that their employers care about them, encouraging commitment to the company. Losing employees costs money in recruitment efforts and the training of new hires. Turnover can cost employers 120-200% of the salary of the positions affected. The presence of this program in your employee benefits package may also help attract new talent.
- Retirement saving. Employees who have their budgets and debts under control are much more likely to save via their 401(k) plan and increase their contributions as their financial situation improves. These employees are also less likely to take a loan from their 401(k) plan.
Becoming an Employer of Choice
Carlson Retirement Plan Services is honored to help employers offer a financial wellness program that can help you demonstrate your understanding that happy, healthy employees are vital for a highly productive company—a win-win situation for all. To learn more about our customized education options and partnership with GoalPath—a personalized, comprehensive online financial education platform featuring a full suite of financial planning, financial wellness, and asset allocation tools—contact us.
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.
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