Financial well-being is not limited to the wallet of employees. Money and security stress can impact the emotional and physical well-being of workers and can end up costing employers in the long run. More and more organizations are taking action to support their teams.
Sixty-two percent of employers say they feel “extremely” responsible for the financial well-being of their employees today, up from 13 percent in 2013, according to a Bank of America study.
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“Employers have recognized that employees’ financial needs have become more complex, so they need to take on more responsibility to help them,” says Kevin Crain, Manager of Workplace Solutions Integration at Bank of America. “[We’ve seen] huge increases in the provision of education, advice and tools on budgeting, savings for college and debt management. “
In a recent one-on-one interview, Crain explained why employers feel more responsible for the financial well-being of employees, what specific benefits they should offer, and how supporting employee financial well-being pays off for employers.
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Why do employers feel more responsible for the financial well-being of their employees?
They recognize that if they don’t help employees with their immediate financial security, as well as their medium and long term security, employees are going to have problems. If the employer takes on this responsibility, 80% realize that they will achieve tangible benefits: more loyal employees, greater employee productivity.
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To what extent does financial well-being impact the overall well-being of an employee?
There is an intersection of three broad topics: financial well-being, emotional well-being, and physical well-being. You cannot separate them. If an employee is not feeling well financially, I can almost guarantee that they do not feel safe emotionally. And if they don’t feel emotionally safe, medical science will show you that stress causes health problems. This is the other reason why employers feel more responsible, because they combine these things and see that there is a huge benefit if they do a much better job of helping the general well-being of their employees.
What specific benefits focused on financial well-being should employers offer?
A pension plan. And depending on their health care strategy, if they have a high deductible health plan, they should offer an HSA. Support for student debt is also a rapidly accelerating benefit. Employers are more and more aggressive in offering real help, that is, monetary help. They can offer an allowance and just say, “Hey, employee, we’re going to give you that amount of money and you have to use it to pay down your student debt.”
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Finally, the care programs will be enormous. There are 40 million to 50 million people in this country who are caregivers. Employees who were caregivers in the past may have felt stigmatized and didn’t even tell their employer because they thought the employer would consider taking time off. Now employers recognize that this is a very important problem. So just as employers have done great things for young parents with babies and toddlers through leave programs, employers are now developing effective caregiving programs.
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How is supporting the financial well-being of employees profitable for employers?
The first and most tangible point is productivity. Employees can lose several hours of productivity per week because they are distracted and worried and stressed about their personal financial security. Employers are realizing that financial well-being is no longer just buzzwords. So if they do it really well, they will achieve significant productivity.
Additionally, if an employer wishes to manage their healthcare costs and moderate healthcare costs that impact them and the employee, implementing a financial wellness program will dramatically improve that ability to do so. . If you don’t have one, you are going to realize much higher health costs due to emotional and physical well-being issues.