Why Your Company Must Offer A Financial Wellness Program
By Right About Money Staff Report
February 16, 2017
Employer-sponsored health wellness programs that emphasize exercise and diet have helped contain healthcare costs and cut down on worker stress. They have become a staple in most large company benefits packages. Now, employers are turning to financial wellness and hoping for similarly robust results.
Three quarters of mid-sized and large companies offer a financial wellness program that goes beyond basic retirement planning, and many plan to expand the program to a wider set of advice services. The goal is to help employees get their personal finances in order, which will further reduce stress and make them more productive on the job.
Financial wellness programs help people address many aspects of their money life—from buying a home and setting a budget to paying down credit card debt and saving for retirement. Companies provide advice through seminars, individual planning sessions and online planning tools.
Millions of workers struggle with money issues: 52% of workers say they are stressed about their finances and 45% say their stress has increased over the last 12 months, PwC found. Nearly half spend three hours each week thinking about or dealing with personal finance issues.
Perhaps most surprising is that younger employees are more worried about finances than older employees—and thus more likely to engage in and benefit from a financial wellness program. That’s probably a good thing. Young workers have more time to correct their financial behavior and find retirement security.
The primary causes of money stress that sap worker productivity are credit card debt, saving for retirement, saving for a college education and meeting basic household needs, according to a study by the International Foundation of Employee Benefit Plans. A quarter of employees say they rely on credit cards to buy basic necessities. Half of all workers lack sufficient money management skills, the study concluded.
Simply offering a financial wellness program isn’t enough. Employers must make workers aware of the benefits through regular communications, possibly as an add-on to the health wellness program they may already be using. Some companies are using incentives like a one-time bonus or free one-on-one session with a professional financial planner.
Some employers remain reluctant to offer yet another benefit. These programs have costs, and it’s not clear how many workers will enroll. But with the right program and a real effort to show workers the value, financial wellness programs can make a big difference to the bottom line of both workers and their employers.