How Financial Wellness for Employees Can Grow Your Business in 2024
In thriving businesses, the financial wellness of employees is not an afterthought but a strategic priority.
As Your Financial Therapist, I’ve seen firsthand how the financial wellbeing of employees can act as a catalyst for a business’s overall growth and success. Simply put, implementing measures to ensure the financial wellness of employees is a win-win.
Not only does it result in happier, more productive team members, but it also contributes to the long-term success of your business.
So, let’s go deeper into understanding the importance of financial know-how for employees, and how it can be the cornerstone for your business’s upward growth trajectory.
Understanding Financial Wellness
The first step is to make sure your employees understand this concept. Financial wellness is not just about having a steady income or being able to pay bills on time. Instead, it’s about building a healthy relationship with money and having the confidence to make sound financial decisions.
In fact, the best financial wellness programs should offer holistic support and advice to employees, helping them meet short-term needs while also planning for the future (source).
The Link Between Financial Wellness and Employee Productivity
Companies are beginning to realize the importance of investing in financial well-being programs. There’s a direct correlation between financial stress and productivity. Employees who are financially stressed might not perform at their best, affecting overall business performance (source).
Moreover, financial stress doesn’t just dampen employee productivity; it also impacts the company’s bottom line. According to a study, financially stressed employees spend an average of 25% of their workday worrying about money (source).
By providing employees with the right financial wellness tools they need, we can create a more productive and focused workforce, which can also significantly increase the company’s bottom line.
Why Financial Health Matters to HR
Human Resources should care about the employees’ financial wellness because it directly affects the work environment. When employees are less stressed about their personal finances, they can focus more on their work, leading to increased productivity and a more positive work atmosphere.
Moreover, financial stress often manifests itself in irritable attitudes and strained relationships among colleagues. By addressing financial wellness, companies can mitigate these negative impacts. Employees who are financially secure are likely to be happier, more cooperative, and less prone to conflict. This leads to a more positive work atmosphere that fosters collaboration and team cohesion. Therefore, financial health is not just a personal matter—it’s a critical component of a healthy, harmonious workplace.
The Current State of Financial Wellness
Despite the evident financial wellness benefits, many employees are still struggling. A recent study indicates that financial wellness is at an all-time low (source). This highlights the urgent need for more robust and effective financial wellness initiatives in the workplace.
The Benefits of Investing in Employee Financial Wellness
Investing in the financial wellness solutions for staff can yield numerous benefits for businesses, including:
- Improved Productivity: Less financial worries means employees can concentrate more on their tasks (source). Financially stressed employees spend an average of 25% of their workday worrying about money. That’s 2 hours a day on average!
- Enhanced Workplace Morale: When employees feel supported by their employers, it promotes a positive work environment and better mental health.
- Better Financial Decisions: With the right tools and education, employees can make more informed financial decisions, leading to overall financial stability (source).
Implementing a Successful Financial Wellness Program
The first step in implementing successful financial wellness training is understanding the specific needs and financial challenges faced by employees (source). These challenges may vary significantly based on their life stages and personal circumstances.
For example, some employees may be moving out of their parents’ home for the first time, while others are grappling with getting out of debt. Some might be first-time home buyers or dealing with the financial implications of caring for aging parents. Other scenarios could include merging finances with a partner or separating finances due to divorce.
Taking a pulse on where your employees are in these life stages will provide invaluable insight into how to best support them. This understanding allows for the development of a program that truly benefits employees by addressing their unique financial situations. In turn, this boosts the company’s bottom line by fostering a more financially secure and satisfied workforce.
Practical Steps to Encourage Financial Wellness
There are several practical steps that employers can take to foster financial wellness among employees.
Here are a few key strategies that have been proven effective:
1. Financial Education Workshops: Regularly scheduled workshops that cover a range of financial issues can empower employees with the knowledge they need to make informed financial decisions. This could include everything from budgeting and debt management to investment strategies (source).
In addition, these workshops could also focus on building a Financial YES! Plan, enhancing communication skills around money-related topics, and exploring the underlying reasons behind one’s debt. By understanding the “why” behind their financial decisions, employees can gain a deeper insight into their financial behavior and make more effective choices in the future.
2. Access to Financial Coaching and Therapy: Providing employees with access to qualified financial counseling is a great way to provide personalized guidance based on individual financial goals and circumstances.
3. Educational Resources and Tools: Another simple way to empower employees is that employers can provide access to digital platforms and resources like budgeting apps, financial calculators, literature on various financial topics, and even helpful videos, such as my Inflate Your Financial Wellness video series. These resources are meant to help with specific topics such as how employees track their spending, make a savings plan, and stay informed about money matters.
Frequently Asked Questions About Financial Wellness
People often need help when it comes to the topic of financial wellness for employees. Here are some common ones, along with brief answers:
What is a financial wellness program?
A financial wellness program is an educational initiative provided by employers to help employees manage their financial resources effectively and understand the role they play in the decision making process around and with money. It typically includes workshops, access to financial guidance, and digital resources.
Why is financial wellness important in the workplace?
Financial wellness is crucial in the workplace because it directly impacts employee productivity and overall company performance. Employees under financial stress are less focused and productive. In fact, experts have projected that poor financial wellness can lead to such a substantial decrease in productivity, that it could result in up to $8,000 in salary loss for the company (source). On the other hand, financially stable employees are more engaged and contribute to a positive work environment.
What are the benefits of a financial wellness program for employees?
Employees can gain several benefits from a well-implemented financial wellness program. These include improved financial literacy, empowerment to make informed financial decisions, reduced money-related stress, and a better overall sense of financial well-being. After all, confidence with money is a skill that is not taught in school.
How can employers promote financial wellness?
Employers can promote financial wellness by providing financial education through workshops, giving employees access to financial advisors, and supplying digital tools and resources to help manage finances. They can also promote it through sources such as webinars, Let’s Talk Finances conversation cards, accountability groups for various ERG groups working towards similar financial goals, and book studies, to name a few.
What is the business case for financial wellness programs?
Financial wellness activities or programs contribute to business growth by improving employee productivity, boosting morale, and promoting better financial decisions. In fact, 80% of U.S. employees report experiencing financial stress, and only 28% of employers offer financial wellness programs (source). These factors can lead to a more focused workforce, improved employee retention, and ultimately, a better bottom line.
In the end, focusing on financial wellness for employees is more than just a nice-to-have. It’s a strategic investment that can lead to significant business growth.
By providing your employees with the resources and support they need to achieve financial wellbeing, you’re not only contributing to the personal success of your employees, but also to the overall success of your business and your bottom line.
Remember, financial wellness isn’t merely about building wealth. It’s about instilling a sense of financial confidence and resilience among your employees. Furthermore, it’s about transforming a traditionally taboo topic into a safe space for learning and growth. This allows your employees to develop and enhance an often underutilized skill, further contributing to their overall financial wellness.
Ready to take the first step towards financial wellness in your workplace?
Don’t hesitate to reach out.
As Your Financial Therapist, I’m here to help guide you and your team towards financial resilience and confidence.
I invite you to book a free consultation today to explore how we can make financial wellness an integral part of your business strategy.
Let’s work together to create a healthier, happier, and more productive workplace.
It’s time we started seeing financial wellness programs not as an extra perk, but as a necessary component of a healthy, productive workplace.