Every employee in America has, at one time or another, felt stressed about the same thing: money. Changes in the healthcare system, tax reform and employer plans are impacting us all. As a result, more and more employees, regardless of age, career or income are turning to their employers for help with their own personal financial plans.
The feeling is mutual, with 81% of employers feeling responsible for their employees’ financial wellness. So, what is the best solution for businesses to help meet their employees’ needs without incurring excessive cost? One solution that many employers have been considering is bringing in outside financial professionals or advisors to run financial wellness programs and even one on one meetings with employees.
Lack of Personal Finance Knowledge Impacts Bottom Line
Currently, nearly one quarter of employers offer individual meetings with financial advisors and another 10% are likely to add this feature in the near future. A primary reason for adding these programs is stress and its effect on productivity in the workplace. Employees spend, on average, two hours a week on their own personal finances at work. This adds up to over 100 hours per year that the average employee is taking from productive work time. This time has been found to directly impact a business’s bottom line.
Research also shows that lost production from employee’s financial stress hurt profits by 4% on average, while 38% of employees said that they would move to a business that prioritized their financial wellness. This cost is not lost on employers. Almost 66% of employers acknowledge that employees are less productive in the workplace when they are financially stressed.
Demographics in the workplace are also having an impact on employers’ decisions to add these wellness programs. For instance, women’s involvement in the global workforce is growing quickly, up 250 million between 2006 and 2015. However, the gender pay gap is still having an impact on the financial well-being of women, making it especially imperative to offer them financial wellness programs in certain regions. (For related reading, see: Equal Pay Day: Sheryl Sandberg Calls For Pay Scale Transparency.)
The influx of Millennials into the workplace also adds a different financial mentality. Millennials, many of whom will never be offered a pension and have concerns regarding the future of Social Security, appear more financially conscious than some of their older coworkers. While Millennials are two times as likely as Baby Boomers to say stress interferes with productivity, 29% of Millennials contribute over 15% to their 401(k), as compared with only 18% of Baby Boomers.
Financial Wellness Programs in Demand
A great number of employees also feel they need assistance planning for various aspects of their financial life. Retirement is the number one concern, with 50% ranking it at the top of financial concerns with which they would like assistance. At least 40% of employees would like their employer to either host seminars with financial professionals to provide general financial education or offer access to a financial professional to formulate an individual financial plan.
The vast majority of employees want to attend these wellness programs. In one study, 86% of employees surveyed said they would attend a financial education program offered by their employer. The benefits of these financial wellness programs appear to be noticeable to employers who are offering them – 57% of employers agree that offering financial wellness programs to employees has a positive impact on productivity.
Employees also seem to be in agreement that an employers’ involvement can have a positive influence. Sixty-seven percent of employees say their employer was influential in causing them to save for their retirement, the study found. Most employees admit that having even an annually scheduled financial review would cause them to assume a more active role in their own personal financial planning.
Key Takeaways for Employers
For employers, there are three important takeaways from this data:
- While employees are certainly stressed about their finances to the point of lost productivity, there are solutions out there to help limit the causes of this stress.
- Employees are actively seeking solutions and would welcome the opportunity to learn how to create a financial strategy.
- By implementing wellness programs and best practices, employers can help employees be prepared for life events and save appropriately.
For employers who have not yet implemented a financial wellness program, it could be a great way to not only attract and retain talent, but also boost morale and even profits.