Workplace Financial Wellness Programs Reap Major Benefits for Employers & Employees
Offering a workplace Financial Wellness Program at your company can benefit both your employees and your own bottom line. Financial Wellness programs offer employees education, guidance, and advice related to budgeting, debt management, investing, and saving for retirement. For employers, the direct return on investment could be as much as 300% or more according to a report by the Consumer Financial Protection Bureau (CFPB), a federal government agency.
Companies which have offered Financial Wellness programs have seen benefits from increases in employee productivity, engagement, retention, and loyalty. Companies also benefit from reductions in healthcare costs, absenteeism, 401(k) administration expenses, and liability.
Benefits to Employers
Companies with a Financial Wellness program saw the main benefit of their program as increasing employee retention (56%), improving employee well-being (50%), and enhancing employee productivity (46%); according to a survey of HR professional by the global accounting firm Ernst & Young. The benefit of increased retention and productivity are obvious to employers. But increasing employee financial well being also has benefits to the bottom line beyond simply happier employees.
Improved Perceptions of Compensation & Benefits
A Price Waterhouse Cooper (PWC) study found employees who are stressed about finances are more than twice as likely to say their compensation is not keeping up with the rising cost of living expenses as those who are not stressed about finances. And financially stressed employees are also 12% more likely to view company benefits as non competitive when compared to other employers. This is especially concerning for companies who question whether the cost of other benefits are worth the investment.
Enhanced Recruiting Efforts
Employers can also see their costs relating to recruiting new employees shrink as well. The same PWC study found employees who are financially stressed are less likely to be proud of their employer and less likely to recommend their employer as a great place to work. The cost of financial stress can have long-ranging implications considering employee referrals is often best source of recruiting the best employees.
30% of employees think about personal finances while on the job, according to an Employee Benefit Research Institute (EBRI) study. And the PWC study found 46% of the distracted employees spend three or more hours per week dealing with personal finance issues while on the job. Solving the financial issues in employees lives’ can improve productivity by nearly 10% assuming a 40-hour work week.