Employers are recognizing financial wellness isn’t just a buzzword anymore
Financial well-being is more than just an employee’s wallet. Stress over money and safety can affect the emotional and physical well-being of workers – and in the long run, cost employers. More and more companies are taking steps to support their teams.
62 percent of employers say they feel “extremely” responsible for the financial health of their employees today, compared with 13 percent in 2013, according to a study by Bank of America.
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“Employers have recognized that employees’ financial needs have become more complex and they must take more responsibility to help them,” said Kevin Crain, Head of Workplace Solutions Integration at Bank of America. “[We’ve seen] tremendous growth in the provision of education, advice and tools for everything to do with budgeting, savings for college and debt management. “
In a recent one-on-one interview, Crain discussed why employers feel more responsible for the financial health of their employees, what specific benefits they should offer, and how supporting employee financial health pays off for employers.
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Why do employers feel more responsible for the financial health of their employees?
They realize that if they don’t help employees with their immediate financial security, as well as their medium- and long-term security, employees will have problems. When the employer takes on this responsibility, 80% realize they are getting tangible benefits: more loyal employees, higher employee productivity.
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How much does financial wellbeing affect an employee’s overall wellbeing?
There is an intersection of three major issues: financial wellbeing, emotional wellbeing, and physical wellbeing. You can’t keep them separate. If an employee is not doing well financially, I can almost guarantee that they will feel emotionally insecure. And when you’re feeling emotionally insecure, medical science will show you that stress causes health problems. That is the other reason employers take on more responsibility because they combine these things and see that there is a tremendous benefit in doing much better to the overall wellbeing of their employees.
What specific financial well-being benefits should employers offer?
A retirement plan. And depending on your health strategy, if you buy a high deductible health insurance plan, you should offer an HSA. Student debt assistance is also a rapidly accelerating benefit. Employers are becoming more and more aggressive when it comes to offering real support, that is, financial support. You can offer a scholarship and just say, ‘Hey, employee, we’re giving you this amount of money and you need to use it to reduce your student debt.’
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After all, nursing programs are going to be huge. There are 40 to 50 million people in this country who are caregivers. Employees who have been caregivers in the past may feel stigmatized and not even tell their employer because they thought the employer would see if they took time off. Now employers recognize this as a very important issue. Just as employers have done great things for new parents with babies and toddlers around vacation programs, employers are now building effective care programs.
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How does supporting employee financial health pay off for employers?
The first, most tangible point is productivity. Employees can lose several hours of productivity in a week because they are distracted, worried, and stressed about their personal financial security. Employers are realizing that financial wellbeing is no longer just buzzwords. So if you do this really well, you will get great productivity.
If an employer wants to manage their health care costs and moderate the health care costs that affect both them and the employee, a financial wellness program will greatly improve that ability to do so. If you don’t have one, you will realize much higher healthcare costs due to problems with emotional well-being and physical well-being.