January is the perfect time of year to underscore the importance of employee financial wellness.
January is Financial Wellness Month. It’s the time of year where people set resolutions — and while setting goals around your physical health and mindfulness practices are profoundly beneficial, financial health should not be overlooked.
Financial stress is the #1 cause of employee stress, more than job, health, and relationship stress combined. Financially-stressed employees are 2x more likely to leave your company, and it’s estimated that companies lose $250 billion annually in lost productivity due to financial stress. Numerous studies have shown how physical and mental health is closely tied to our financial health.
Whether you have a financial wellness benefit or not, you can still promote wellness among your employees engaged around this critical time. It’s something that requires engagement from several angles.
Here are a few best practices to get your teams participating in Financial Wellness Month.
1. Take stock of employee needs and interests
Engage with your employees to get a sense of what they’re looking to gain from financial wellness benefits.
While this may seem simple, many companies spend more time telling their employees what they should care about rather than simply asking them what their concerns are.
Engage with your employees to get a sense of what they’re looking to gain from financial wellness benefits. Whether it’s through surveys, office hours, or an open forum, understanding the unique needs of your teams will allow you to engage with them in an impactful way.
Are your employees looking for help planning for retirement? Paying off student loans or other consumer debt? Planning for a wedding or a growing family? Do they need help understanding investments? Or understand how to take advantage of tax-advantaged accounts, such as FSAs, HSAs, or 401(k)s?
2. Improve financial literacy
It’s no secret that Americans struggle with their finances. A study found that only 1/3 of adults could answer at least 4 of 5 financial literacy questions on fundamental concepts such as mortgages, interest rates, inflation, and risk. Another recent study found 2/3 of U.S. workers want to make more informed decisions about their investments, but don’t know how.
Awareness is the first step to getting folks engaged in their financial journeys. Financial Wellness Month is an excellent opportunity to educate your teams on what it takes to become financially fit. HR teams can:
- Invite a speaker to address basic financial concepts (such as budgeting or investing)
- Host a monthly workshop to review common employee financial questions (such as how to save for retirement, maximize by tax savings, or start a savings account)
- Send a list of recommended blogs, books, or podcasts to help employees
3. Start engagement early
With an increased level of financial stress but nowhere to turn, nearly all (93%) employees indicated that they’re looking to their employers for financial planning. Unfortunately, less than one-third (28%) of companies are giving workers the financial guidance they need.
Setting a precedent that your company’s financial health is a priority can help shape a culture of engagement around financial benefits. The more HR leaders can educate their team about the benefits of financial wellness, the more likely an organization is to invest in the right resources.
The more HR leaders can educate their team about the benefits of financial wellness, the more likely an organization is to invest in the right resources.
Incorporate this information into your standard onboarding practices, send an automated reminder through Slack or email about financial wellness benefit offerings, and don’t assume your employees will remember the benefits you offer.
4. Promote company contributions
Ensure your employees are aware of company contribution opportunities. The 401(k) is one of the most common and familiar financial benefits employees participate in. In fact, a 2018 PSCA survey found that 84.9% of employees are contributing to their 401(k)s.
Whether you offer automatic enrollment or highlight this benefit in recruiting practices, employer 401(k) match is a highly effective way companies can commit to their employees’ financial wellness. It’s also an opportunity to exhibit actionable care for employee wellness. It could be the piece of information that encourages folks to enroll at all. If your company is not currently offering a match, consider adding it into your wellness offerings to enable your teams to start saving.
Choosing a proper financial wellness program is a step in the right direction when it comes to supporting the financial needs of your workforce. Origin is a comprehensive financial wellness platform that helps employees manage their compensation, benefits, and personal finances — all with the personalized guidance of financial professionals. By combining cutting-edge technology with the expertise of real humans, we help companies support the financial journeys of their workforce, every step of the way.