Your organization offers incentives and programs to support employee health, fitness and often many other elements of their life, but what about finance? Do you have an understanding of your workers' financial position or concerns?
More organizations are recognizing the importance of supporting their employees' financial health as well as other aspects of their work and personal lives. Socially conscious employers committed to diversity, equity, and inclusion simply can’t exclude financial wellness from their employee benefits.
Capital One found 73% of people consider finances their number one cause of stress, so if an employer can actively work to minimize this in their workforce, why wouldn't they?
Bank of America's 2020 Workplace Benefits Report found 60% of employers feel extremely responsible for their employees' financial wellness, a leap from 13% in 2013, showing that a commitment to supporting employees financially has become more important than it once was.
Financial support for employees is often around education and providing effective tools and technology to enhance their ability to manage their finances effectively. However, while there is the hope to achieve a holistic approach to financial wellness in many organizations, there are many more where employees' most basic financial needs aren't yet being met.
Recognizing support and knowledge gaps
Nudge Global reports that over 50% of Americans are not being offered the personal financial education needed for their circumstances by their employer. Similarly, the report found a gender gap in knowledge, with 59% of men receiving this benefit and only 40% of women.
Personal financial education is something employers can and should provide their employees with as they're in the unique and valuable position of being able to help their employees manage their money and, therefore, their lives more effectively and suitably. The right financial tools can empower workers to make better financial decisions and minimize the pressure of money worries and debt.
John Hancock reports that financial stress costs employers approximately $2,169 in reduced productivity and absences per employee. This is a huge financial loss for any organization. Still, it’s also important to remember how individual employees suffering from such stress can’t effectively do their jobs. Any employer committed to their workforce and social responsibility should consider how small changes and incentives in the workplace can empower employees to significantly improve their financial health and improve their lives both at work and at home.
Creating an employee wellbeing program
While you may have a long-term goal of improving financial wellness across your organization and for all your employees, it’s important to consider small changes you can make.
Tweaks to your approach to paydays, shift patterns, and everyday work may have a significantly positive impact on your employees' financial wellbeing. PwC reports that over two-thirds of employees only seek financial guidance once they're already in a crisis or at key decision points. Crafting an employee wellness program that provides support before the crisis is vital.
Improving employee financial wellbeing shouldn’t be about trying to solve all their problems. It should give employees the tools they need to find their own solutions and opportunities for education. Your employees' financial stressors will differ from person to person. Therefore, there’s no cover-all solution. Instead, adopting an approach that ensures you have tools for different situations and safety nets where necessary, is best.
Financial services your employees need
Recent surveys suggest that 61% of the US population lives paycheck to paycheck at the end of 2021. This percentage applied to workers in all wage brackets and is closely linked to increased living costs and prices.
Getting from one payday to the next is becoming increasingly difficult, and many employees are looking for support and solutions from their employers to help them get to the end of each month.
There are many financial services that an employer could provide to support employees manage their money more effectively but also add flexibility to their working lives. Something as simple as Earned Wage Access (EWA) can help your employees quickly benefit from their own earned income, helping them manage their daily and weekly expenses and avoid the trap of debt and credit utilization that comes with waiting for each payday.
EWA also effectively combines with other financial products and services such as flexible shift scheduling. Employees may opt to take on additional shifts knowing they can easily access a percentage of these wages soon after the shift finishes. As a result, employees' interest in additional shifts increases in line with their ability to quickly access their earned cash.
At Payactiv, our EWA and shift scheduling feature forms part of our holistic financial wellness platform. Designed to help employees manage day-to-day finances and bills without taking loans, the platform incorporates many opportunities for education and learning and practical access to funds. The SmartSave feature helps employees build a savings pot as well as access discounts and savings for everyday things like gas and prescription medicine. Our platform allows businesses to empower their employees with better money management and, of course, benefits the employer too.
Happy employees, happy company
Employees who are unburdened by financial stress are more motivated and happier in their jobs. The pressure of constantly worrying about debt can be alleviated by an employer committed to promoting and supporting financial wellness amongst their employees. Both the individual and the business reap the rewards, and any employer with a social conscience should recognize the value of helping its people to a better financial position. It reflects well on the organization's reputation and actively ensures people live better and have more financial freedom.
Recognizing the importance of financial wellness and education is vital in improving your employees' experience. Making steps to offer support to your employees helps position you as the socially responsible employer you want to be.