With so much uncertainty due to COVID-19 and its effects on the economy, what can employers do to help employees cope? The future is uncertain, and salary raises and additional cash compensation may not be available, but there are other ways to show you’re invested in their well-being. The answer is wellness programs. Or, more specifically, financial wellness programs.
According to the World Health Organization, health is defined as a state of physical, mental, and social well-being. And financial health plays a large part in this. Matters of money, savings, investing, and spending can affect employees’ well-being, which affects their performance in the workplace. According to a study conducted by the Society of Human Resources Management (SHRM), 83% of HR professionals reported that personal financial challenges had some degree of impact on overall employee performance.
Indeed, financial health and wellness programs can lead to happier, less stressed, and more productive employees. With that in mind, how can a company help its employees be more financially healthy? Let’s look at five ways.
Encourage Participation in Your 401(k)
Since financial wellness usually includes planning for retirement, it’s important to encourage participation in your company’s 401(k) plan. While most employees are well aware of their compensation in terms of salary, they may be less aware of their 401(k) and other deferred compensation plans.
Host online discussions during which employees can learn more about their 401(k) plan, and create a private discussion channel through which employees can submit questions that they usually might feel shy asking directly.
Offer Financial Planning and Money Coaching Workshops
Lean on your benefits suppliers and ask them about any financial health and wellness programs they offer their corporate customers. Such programs usually include a mix of both human and digital assistance regarding financial planning.
MetLife offers PlanSmart, a financial wellness program, for its clients’ employees, currently totaling over one million. Publishing and communications company Cox Enterprises provides employees with free access to one-on-one phone consultations with money coaches. These private conversations cover topics such as debt counseling, retirement planning, budgeting and student loans.
Extend Payroll Deduction for Emergency Funds
As most financial advisers and gurus suggest, it’s important to have an emergency fund. Some suggest having the fund for three months, and some recommend one year. Work with your paycheck provider and the employee’s bank to create a special account that would effectively serve as an emergency fund. Employees can elect a portion of their compensation to be directed to that account. This is one way to help the employee feel more financially healthy.
Provide Tuition Reimbursement
While not a benefit tied directly to retirement savings or investing, providing tuition reimbursement is another way for employers to give a non-cash benefit that can contribute to financial wellness.
With most platforms moving to online learning, the costs of providing e-learning to employees have dropped significantly. Even smaller and midsize companies can leverage platforms like LinkedIn Learning (formerly Lynda.com) and Udemy to provide cost-effective courses for their employees. This continued education helps them advance their skills and improve their work performance (and eventually their chances for a raise or promotion).
Incorporate a Money, Credit and Identity Service
One of the most significant indicators of financial health and wellness is the ability to manage money, credit and your identity. Low credit scores mean a higher cost of credit, often with less than favorable terms.
Consider providing your employees access to education with a money and credit modeling tool like ScoreMaster that will help them understand what factors might be affecting their score, and how to get their best credit score. It can help employees understand the dynamics of credit utilization and the impact of large purchasing decisions.
Improving financial wellness can be a significant benefit for both employees and employers. However, it’s important to figure out the mix of initiatives that work best for your employees. Many keep their financial matters private and might not wish to share such personal information with their employer.
Above all, it’s essential to keep in mind that workers who are better at managing their finances are less likely to end up stressed and perhaps negatively affect their day-to-day work. PricewaterhouseCoopers found that almost half of employees worried about their financial health are less productive at work, spending at least three hours each week dealing with personal financial issues. All the more reason to implement and invest in financial wellness perks for employees.