Lessons From COVID-19: An Opportunity for Financial Wellness
The arrival of COVID-19 was a wake-up call for employers and employees alike.
For many who were already struggling to make ends meet, the pandemic added financial stress from an economic downturn, job losses, and no schedule for how long the slump would last. A PwC survey of employees’ financial health found that last year, more employees than ever before considered filing for bankruptcy protection.
And economic uncertainty is still wreaking havoc more than a year later – as finances are still the main source of stress for employees – PwC reported that two-thirds of respondents reported increased financial stress.
But as things slowly improve with widespread vaccines and signs of a recovering economy, there is an opportunity for employees to make financial changes to prepare them for future hardships. And there is a way for companies to foster a culture of financial wellbeing to help them get there.
Here are some tips for businesses to help employees achieve financial wellbeing:
Offer customized financial literacy programs for employees
Many companies now have a unique opportunity to better understand and respond to the financial needs of their employees. The employees come from a wide variety of backgrounds and are in different phases of life and different financial stability. Some can live from paycheck to paycheck, others may have a small nest egg to invest for the first time, and others may want to build on their investments and protect their assets. Hence, it is important to offer programs that can be customized, as opposed to a one-size-fits-all approach.
Encourage the use of digital tools
Digital apps can help navigate and organize an employee’s financial information, as well as other aspects of their life, to help them achieve a better work-life balance. Some of the most popular tools include Google’s Digital Wellbeing site, Digital Garage, and Calm. Implementing digital wellness tools into a financial wellness program pays off for companies that benefit from a productivity standpoint when their employees are more stable, focused, and happier.
Finance is fun
One of the most common challenges employees face in financial training is the ability to fully absorb the frequent flood of information. When evaluating the nature of a financial wellness program, it is important to find interactive ways to involve employees. Studies by Elsevier and Procedia have shown that the combination of fun in learning increases motivation and long-term memory. Complementing this concept, game-based learning methods like the Investopedia Stock Market Simulator or the classic real estate board game Monopoly are great examples of how simulated finance lessons are effective tools in the real world.
Financial wellbeing isn’t an overnight goal, but planning, patience, and commitment can go a long way. A consistent and holistic approach to financial health involves the involvement of employers and employees. From employer-sponsored savings plans to variable remuneration and performance-based income to smart decisions when investing in your own future, there are many ways to continuously improve your financial performance.
If the pandemic has taught us anything, it is above all that we are all involved together. With many organizations now in reset mode, this is the perfect opportunity to implement a plan to build employee resilience during times of crisis.
Most of us did not anticipate a COVID-19 event, but now that we have experienced it, we can at least be prepared for future scenarios. For companies it is an opportunity to foster a new level of trust and loyalty among employees. By helping them find a path to financial and, subsequently, emotional wellbeing, organizations can provide a foundation and resource for employees to turn to when they need it most.
Ed Powers is Vice President of Membership for First Tech Federal Credit Union, based in San Jose, California, which is $ 14 billion.