When employees are not well, they cannot function properly at work. Physical illness is not the only measure of wellness; mental health and financial health needs have been attracting more attention as these two aspects contribute greatly to an employee’s ability to perform. But unfortunately, employees may not be so open about discussing these, which makes it challenging to create impactful financial wellness programs.
First, the Level of Impact
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. PwC found that almost half of employees who are worried about their financial health are less productive at work, spending at least three hours each week dealing with personal financial issues.
“Employees are often private or embarrassed,” explains Robert Stewart, HR administrator at Brigham Young University of Idaho, in an article in HR Executive magazine. “When someone asks you how you’re doing, you don’t say, ‘I’m almost bankrupt.’ It’s challenging and almost taboo in that we don’t want to dive into their personal business and yet we are paid to care about the bottom line and we care about their lives.”
Lean on the Success of Health and Wellness Programs
A study conducted by Prudential Financial found a strong correlation between employee use of both health and financial wellness programs and improved physical and mental health. Prudential’s study found that respondents who take advantage of these benefits programs are more likely than others to report lower levels of stress, as well as better physical and mental health. Prudential’s study also showed how even small changes in socioeconomic position can impact health risk, with incremental increases in income associated with improved health.
“Workplace health and financial wellness programs can make a positive difference in the lives of American workers,” explains Judy Dougherty, Prudential’s chief financial wellness officer. “Financial and physical health are often intertwined, and employers who provide help on both fronts stand a greater chance of achieving better outcomes for their employees.”
So, what is an organization to do to help improve employee financial wellness? How will they know that if they provide additional benefits related to financial wellness, that there will be adoption? Read on for help.
1. Financial Advice Is Not Just for Retirement
One of the primary ways that employees have traditionally received some degree of financial literacy is through their employer’s 401(k) or other retirement plans. It is obviously in the company’s best interest to promote employee participation in their 401(k), however, this plan might not be right for some employees.
As such, employers can consider providing access to or at least information about other investment vehicles, such as the traditional and Roth IRAs, or 529 plans so employees can save for their children’s college education. Access to financial advisors, through which employees can ask questions without persuasion to invest, or even judgment, should be a component of this benefit.
2. Student Loans and Tuition Reimbursement
While student loan forgiveness is most likely not an option for employees working for a for-profit enterprise, organizations can still deliver financial wellness benefits in the form of education. Companies can help their employees learn about various student loan debt relief options, including income-driven repayment, deferment, forbearance and refinancing, without the need to contact lenders or student loan servicing companies.
Additionally, companies can help employees with financial wellness by removing stress related to incurring new, additional educational expenses. Organizations can offer tuition reimbursement for part-time distance learning courses, in addition to free in-house learning and professional development programs that save employees money and keep them on the job.
3. Credit Monitoring and Awareness
Credit may seem to have little to do with compensation and benefits, but the ability to manage credit and increase a credit score can reduce employee stress. For example, a higher credit score can mean spending less per month on a car payment, among other obligations. Those with a strong understanding of credit management ultimately save thousands of dollars in interest and fees in their lifetimes.
Employees can benefit from access to a research and education tool, such as ScoreMaster, that provides simulations of credit scores based on hypothetical payments and spending decisions. More insightful than a static credit report, such a tool can help employees understand the dynamics of credit and the impact of large purchasing decisions.
Employers have to do more than simply announce that these perks are available. Because employees might be embarrassed to admit that they need help, HR leaders need to find more subtle, less intrusive but still visible ways of communicating the availability of these additional benefits. With employees working from home, information can be uploaded to the employee intranet or links can be published in a benefits wiki.