With studies showing high levels of employee stress about their finances that’s translating into lost productivity, absenteeism or health issues, the time is right for financial wellness programs in the workplace.
There’s an opportunity for employers to step in and offer much-needed guidance, but they could (and should) be helping workers with far more than the basic advice about where to put their retirement contributions. Employees need help navigating day-to-day money issues, such as student loan repayment, managing credit card debt, saving for a down payment and building emergency funds. And older workers fret they may outlive their retirement savings — assuming they have any in the first place.
Just like supporting employees’ physical or mental health, the first step to improving their financial well-being is through awareness, education and supports. Here are four considerations to build a financial wellness strategy:
1. Commit to financial well-being
Organizations that believe they have a responsibility to educate their employees on financial issues tend to have more successful programs. Most workplace wellness programs offer seminars or lunchtime sessions on topics such as physical activity, nutrition and managing stress. Adding seminars about financial health may be the first step to helping employees understand concepts like budgeting or the difference between registered retirement savings plans, registered education savings plans and tax-free savings accounts.
2. Offer varied topics and methods
Workplaces with successful programs provide education on multiple topics, including savings, debt repayment, investments, mortgages, insurance, spending, wills, health care in retirement and pre-retirement financial planning.
Employers can offer financial wellness training through a variety of formats, including personal consultation services, classes and workshops, online resources, workbooks and calculators. Employers can partner with and leverage relationships with third-party subject experts, such as their financial institution or employee assistance program provider.
3. Target programs to employee needs
Information is more effective if it resonates with the learner. While that seems obvious, many employers use generalized communication strategies to reach diverse team members. With five generations in the workforce, employers will have greater success with customized educational programs that vary according to age or income level.
4. Offer financial counselling
When we think of employee assistance programs, we immediately think of mental-health or crisis-counselling services. Yet employee assistance programs can offer a wide variety of personal counselling supports, from nutritional coaching to financial advice. Personalized financial counselling is an emerging support tool because counsellors can readily adapt to different types of employees in highly diverse workforces.
When introducing financial wellness supports in the workplace, some companies worry about backlash or lawsuits from employees or retirees over advice that didn’t generate profits. For employees, there’s the very real concern about privacy.
But the benefits far outweigh the risks. In addition to increased productivity and lower absenteeism, a more holistic financial wellness program can help with employee attraction and retention. Above all, the goodwill employers generate from offering financial counsel to employees struggling with personal finance stresses is worthwhile.