More and more companies are beginning to offer financial wellness benefits to their employees – 84% of large- and mid-sized businesses now offer some form of financial wellness perks, a figure that keeps climbing. This isn’t just a random trend. With reports that 53% of employees are stressed about their finances, and student loan debt at astronomical levels, modern day workers are feeling the pressure of their financial situations. Businesses are also starting to recognize that it's in their best interest to provide perks that help to alleviate some of that stress so that employees can do their best work.
Why Offer Financial Wellness Benefits?
1. Reduce Employee Stress
Worrying about finances causes great stress, and great stress is not ideal for the workplace. Constant stress isn’t just incredibly distracting; it also increases the chance of illness due to the physical toll it takes on the body. Stressed employees don’t have the mental energy to fully devote themselves to their jobs, which affects every aspect of a business.
2. Reduce Absenteeism
If stress leads to a higher chance of illness, it’s likely that your overly stressed employees may end up missing a lot more work. But illness isn’t the only reason employees might have to miss work. If money is tight, employees might have to miss work if car troubles arise, or if childcare arrangements fall through. After all, 69% of Americans have less than $1,000 in savings, so if a sudden emergency comes up, many people won’t have the financial flexibility to handle it without having to take a day or two off from work.
3. Improve Productivity
This one is obvious, but by reducing the financial burden weighing upon your employees, you free them up to focus more on work. The mind can only focus on so many things at once, and financial worries are a distraction standing in the way to getting work done.
4. Attract More Job Applicants
Perks and benefits play a big role in attracting job applicants to your company. In a tight labor market, benefits can help a company stand out in order to compete for top talent. It also helps to bolster your company’s employer brand and image as a desirable place to work.
5. Increase Retention
It’s a bit Machiavellian to suggest that companies should only invest in financial wellness benefits to improve the bottom line. Many companies that offer these types of perks do it because they truly do care about their employees as people, and this care in the well-being of their staff translates into a better work culture, greater loyalty, and higher retention. People like working for companies that make them feel cared for, and financial wellness benefits are one way to show that level of care.
What Companies Can Do
Financial wellness benefits come in many forms, but they generally aim to help employees both manage their finances and set themselves up for a healthy financial future. These perks go beyond your typical medical and dental coverage. They are targeted at promoting long-term financial security.
One of the most common (and increasingly popular) financial wellness benefits is a 401(K) plan. Many companies take it a step further by offering 401(K) matching, typically involving the employer matching some percentage of the employee’s contribution. These types of plans encourage retirement savings because not participating in a matching program is essentially like leaving money on the table. The rise in the 401(K) has picked up in response to the decline of the pension, a trend that will likely continue.
There are a lot of other creative benefits that companies are adopting. Some of these include student loan assistance, tuition assistance, and financial training seminars. Companies interested in looking out for the financial well-being of their employees can adopt any combination of these types of perks, depending on their employees’ needs.