HR Pros: Create Financial Wellness for Your Employees

COVID-19 sheds light on a growing problem for a number of U.S. households. Many people are living paycheck to paycheck and just missing an eviction notice or have the inability to put food on the table. Students continue to prove that today’s households are facing a lack of financial wellness.

Today, even as a pandemic continues, when asked what the most worrisome aspect of life was in a PwC survey, 54% of households answered financial or money matter challenges. The same survey found just how unprepared for extended economic downturns people are by looking at various age groups. For example, employees with less than $1,000 saved to handle an unexpected expense include:
62% of Gen Z
37% of millennials
34% of Gen X
37% of baby boomers

As an employer, it’s critical to see the risks that come from a lack of financial health. It’s also important to establish financial wellness planning within your organization to support your employees.

What Is Financial Wellness? Why Is It So Important?
Financial wellness is often a misunderstood term. It’s not just about providing health benefits or a retirement plan. Rather, it’s a more comprehensive approach. It is made up of various programs that help assess and then support employees from a complete financial picture. The goal is not to just provide a retirement plan or to provide a health care package, but to create a plan for overall well-being.
Financial wellness includes resources and tools to manage short-term problems and meet long-term needs. It’s important to have some balance between planning for immediate needs while also working to build long-term goals at the same time. It’s about teaching how to live responsibly today while also working to meet tomorrow’s goals.

By providing employees with the knowledge and support they need in financial wellness planning, employees gain the confidence they need to manage the next economic storm. They have the means to live beyond a paycheck and don’t have to depend on Social Security as their own form of income during retirement. Why is this important? Simply, employees have no other place to get this type of education and support.

How Does a Financial Wellness Plan for Employees Benefit the Company?
The benefit to the employee of a financial wellness plan is easy to see. They have the funds they need for today’s needs, but they also have a plan for later. What about for the company?
Financial wellness programs help reduce employee stress. These programs may also lead to improved retention because employees view them as a key benefit and resource. It also improves employee engagement in the company. In a tough labor market with limited talent available, these programs can help companies stand out from others.

Financially unhealthy workers create challenges for employers. They add to costs related to wage garnishments and costs of loans from 401(k)s. It pays to offer a program like this.

Getting Started: What Does a Financial Plan Look Like for Your Organization?
It sounds expensive. It sounds labor-intensive. It doesn’t have to be any of these things. A workplace financial wellness program provides financial literacy workshops, one-on-one financial training, and much more for employees. What’s more, the Premia Mortgage Financial Wellness Program combines education with concrete support for employees.

Your financial wellness program can incorporate a range of services to your team. This includes financial counseling with coaching services for employees and virtual, over-the-phone, or in-person sessions. Debt management plans and credit repair services can be an option, as well. You can implement traditional financial products like retirement plans, loans, and checking accounts. It may include the use of FinTech solutions to manage money better and tools for checking credit reports.

Once you design this type of program and plan for your team, it’s important to communicate what you're offering and why to your employees. Engagement in such programs is likely if employees know what they offer and why it directly benefits them. How can you do this?

Creating awareness of these programs is important. You can easily do this through normal communication, such as emails and monthly newsletters. However, it's also worth putting together a package or handout that presents insight and step-by-step information to employees.
It's important that this type of awareness program provides a way for employees to see what’s in it for them. The best way to do this is by sharing success stories. By showing them what they can accomplish through these programs, employees are more likely to engage in it. Sharing success stories can also entice people to take a closer look at their own financial well-being and determine if they really are where they should be or if they can do better.

The next component is putting your plan into action. Educating your employees requires professional support and guidance. It requires a concentrated effort toward achieving the goals you set out to create. There are many ways to educate your team.

Webinars – This is an easy way to get individuals interested and allow them to interact from any location.

Lunch and Learns – A more in-person friendly option, it requires participation and gets people to actively engage in what they are learning.

Online Resources – Providing resources, such as interactive lessons or even training programs online, allows your employees to engage again and again with the material, at their own pace.

Educational Materials – Providing assets, like pamphlets and how-to guides, can provide improved engagement.

Personal Help – Having professionals available to guide and support employees on this learning journey is important. Most will have moments of frustration or may need clarification. Ensure there is some form of help readily available.

Employee Assistance Programs
Employee Assistant Programs (EAPs) are typically associated with helping employees through emotional counseling and support for mental health or other complex needs. Yet, they can also provide financial counseling as well. This type of benefit can include anything from a 30 to 60-minute phone call with a financial counselor to providing in-person support and guidance. Employees can learn more about their financial health and understand the proper steps to take in improving financial health. EAPs can help with most types of employee issues related to finances.

How Do You Measure the Influence of Your Financial Wellness Program?
You’re investing in a financial wellness program, but how do you know it’s going to pay off for you? One clear way is employee engagement. You will know, from the start, that the more people who engage in it, the more you are helping to have a sound financial plan.

You may notice a change in your employees, too. Employees with better financial management have less stress, are more engaged in what they are doing, and more likely to show up and put in their best for a company that is working hard to meet their needs. Companies that invest in financial wellness resources like this stand out from others in their industry. Surveys from employees can also show this.

You may also see that employees are more likely to leverage their existing benefits to the fullest. These benefits include things like the 401(k) account you’ve put into place for them.

Why Financial Wellness Is a Must-Have Employee Benefit
The employee financial wellness plan is a tool that every company should invest in. It's a low-cost, high-return plan that allows companies to retain and attract top talent, engage in employee well-being more readily, and meet the needs of today’s employee base. Reach out to Premia Mortgage today to learn more about how we can help you help your employees finance a home.
- Oct 04, 2021