This isn’t the first time we’ve talked about financial well-being, and it won’t be the last. Financial well-being has become a hot topic for employers and employees alike, and with good reason: Financially stressed employees spend 20 hours per month worrying about personal financial issues, making them less productive on the job. And this has a direct impact on a company’s bottom line.
According to the 2016 Workplace Benefits Report by Bank of America Merrill Lynch.*
- 55% of employers believe financial well-being leads to greater productivity
- 58% of employees need financial planning to help them manage all aspects of their financial life
- 81% of employers feel that they are responsible for their employees’ overall financial well-being
It can be very difficult for employees to pay daily living expenses and save for the future at the same time. This is especially true for employees living paycheck to paycheck. But, the good news is there’s something employers can do to help: Incorporate a financial well-being program at work. A financial well-being program can focus on anything financial, from creating a budget to saving for retirement, as long as it provides real value to employees.
So what should a financial well-being program include?
Education. The best way to ensure financial well-being is through a well-designed education program that doesn’t include a sales pitch. For a financial well-being program to be truly valuable, it should also be considered an employee benefit, and it should be communicated to employees as such.
When employees are taught that making small changes now will make them more financially secure in the future, tackling financial problems doesn’t seem as overwhelming. This keeps them motivated to do more.
Measurable results. A sound financial well-being program also should focus on measurable behavioral changes, such as:
- Reducing expenses.
- Paying down debt.
- Saving more for retirement.
Research shows that, after taking a financial well-being class, 89% of employees take at least one step to improve their finances within 30 days. And on average, employees begin reducing credit card debt, reviewing their 401k plan and using retirement calculators to determine whether they’re saving enough.
Communications. Any communication about a financial well-being program should tell employees that the program:
- Is a valuable benefit.
- Offers unbiased financial education.
- Can help you manage your personal finances.
*The Bank of America Merrill Lynch Workplace Benefits Report is an annual study focused on the role financial benefit plans. Read the report.