The Impact of Employee Financial Wellness on Your Company

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More than half of workers in the U.S say they’re stressed out about their financial wellness despite a strong economy. Money is a necessity, and employees need to have enough to pay for the essentials like rent, food, transportation, and student loans. Of course, most people also want to have enough cash to enjoy themselves too, like going on vacation or dining out.

Financial wellness has a significant impact on every part of life. A survey from PwC found that those who cannot keep up with their finances find it more challenging to focus on their professional responsibilities. This stress, in turn, can cause financial losses for companies over time. Financial Finesse found employees with poor financial wellness have higher absenteeism and delayed retirements.

Every company should make the health and wellbeing of its employees a top priority. It pays for companies to provide support and create a work environment that helps employees achieve better personal financial health. In fact, research has found that even a small increase in financial wellness can save companies up to $5.6 million a year.

Companies that prioritize workplace wellness can enjoy several other benefits:

• Attracting the best talent
• Reduced employee turnover
• Improved productivity
• Improved employee satisfaction and engagement

It’s no wonder more companies are investing in training programs to address financial wellness. According to a 2019 study, the financial benefits market in the U.S is poised to reach $825 million by 2024.

How can Employers Improve their Employees’ Financial Health and Well-being?

Here are several ways employers can help their employees manage their finances:

• Provide resources and tools for financial wellness. It’s essential for employees to understand how their financial health impacts their life as a whole. Make sure that employees are given resources to learn and understand how to manage their finances.

• If possible, cover any work-related expenses right away. Most companies reimburse travel and accommodation costs for employees on work-related trips, but paying for these expenses up front will save your staff from having to deal with the reimbursement process.

• Make sure you have Workers Compensation insurance. There’s a reason this policy is a legal requirement in most states, it’s designed to cover the medical expenses in case an employee gets sick or injured while at work. It also covers the lost salary of the employee during their rehabilitation process.

• Work with financial services providers. Help employees manage their finances by offering savings programs with a reputable financial services provider. This will significantly help your staff in developing healthy financial habits, like saving for retirement or putting away a portion of their wages for a rainy day fund.

• Train HR teams and managers on how to support employees who are dealing with financial issues. Devise a program that will help identify the causes and effects and come up with solutions so the employees can cope with the situation.

How can Employees Improve their Financial Health and Well-being?

Employers are not the only ones who have the responsibility of making sure that financial problems are dealt with. If you’re an employee with financial issues, there are several things you can do to make sure that you’re always on top of your finances.

• Know your monthly income and expenses.
• Follow this formula: your income – your savings = the budget you have left to pay for your expenses.
• Stick to a budget.
• Pay your bills on time and in full.
• If you have multiple debts, prioritize paying off the one that have the highest interest.
• Consult a financial advisor on how to better manage your finances.
• If you’re still strapped for cash, trying starting a side hustle.

Many employees deal with financial stress regularly. They need to save and at the same time, pay off their debts. Managing this can be challenging, and this affects the way they perform at work. Employers need to do something to make sure that their employees are both physically and mentally well. When your employees are not stressed about their finances, they can work better and contribute more to the company. It’s a win-win situation.

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The purpose of Human Resources (HR) is to ensure our organization achieves success through our people. Without the right people in place—at all levels of the organization—we will never be able to execute our Strategy effectively.

This begs the question: Does your organization view HR as a support function or a strategic one? Research shows leading organizations leverage HR as a strategic function, one that both supports and drives the organization's Strategy. In fact, having strong HRM capabilities is a source of Competitive Advantage.

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