While a physical wellness program is not a new concept to most employers, a growing number are taking wellness a step further and offering financial wellness benefits, such as providing access to retirement planning advice.
According to a Prudential survey on employee benefits, many employers are embracing the financial wellness benefits trend with 83% of those surveyed currently offering financial wellness programs, and 14% planning to offer them in the next year or two. The surveyed employers did vary on the types of workers they offer such programs, with 26% only offering them to full-time employees, 27% also including part-time employees and 30% including contractors.
So why are financial wellness benefits important? Financial stress can have a huge impact on an employee’s emotional, physical and mental well-being, and offering programs designed to help employees with their finances can have a significant effect on their lives.
Many employees worry about their finances and consider financial issues to be a big source of stress. Such stress can lead to increased absenteeism, lower productivity, being distracted at work, and even negative effects on employee health. In fact, more than half of the participants in an Earnin survey said they had delayed health care treatment in the prior 12 months because they couldn’t afford it.
Financial Benefits Offerings
Addressing employees’ financial issues could greatly enhance employee well-being. Financial wellness benefits can aid employees in a variety of different ways, including helping them:
- Manage their money;
- Reduce financial stress;
- Understand financial investing;
- Make sure they are on track for retirement;
- Deal with financial troubles;
- Work toward meeting life financial goals; and
- Be financially healthier overall.
Benefits that promote such employee financial wellness may include:
- Financial education, counseling and/or training;
- Retirement planning;
- Debt counseling;
- Student loan assistance;
- Identity theft benefits; or
- College savings programs.
The Multigenerational Workforce
One key to designing a successful financial wellness program in your workplace is addressing workplace diversity. Generational diversity in the workplace is at its highest level ever: five generations work alongside each other at organizations across the country. This means an organization’s workforce may have a very broad range of financial wellness needs.
Since what one employee would value in a financial wellness program may be completely different from the employee working in the next office, employers should try to provide an array of financial wellness benefits that are appreciated by members of various generations. Younger employees, for example, may want student loan forgiveness plans, while older employees may be looking for investment opportunities and help with retirement planning.
Student Loan Assistance
While financial wellness benefits as a whole have been a recent trend in the employee benefits arena, student loan assistance benefits have received even more media attention lately. Many surveys and studies have revealed that millennials and Generation Z are worried about student debt. This is undoubtedly because these generations are graduating with more debt than any other generation, and they are worried about their future financial well-being.
As a result, more employers are trying to ease this financial burden by offering student loan assistance as an employee benefit. There are a variety of different ways to structure such a program. For example, an employer may offer a certain dollar amount a year toward paying off student loans, along with a lifetime maximum amount. Others may offer a set monthly matching amount for payments employees make to their student loans.
Employer interest in student loan assistance will probably only continue to increase, especially after the IRS approved an employer’s proposed program to add a student loan benefit to its 401(k) plan earlier this year.
With the current jobseeker-friendly market, employers are facing many challenges when tasked with recruiting, hiring and retaining the best and the brightest employees. Due to the rise in interest in financial wellness benefits, an employer may want to review its organization’s current benefit offerings to determine how its employee benefits program aligns with this latest benefits trend.
An employer can then determine what, if any, financial wellness benefits it already offers and if there is anything it might want to consider adding in the future. When doing so, employers should consider the following:
- Finding out what financial benefits their workforce values;
- Ways to increase participation in financial wellness programs;
- Incentivizing financial wellness programs;
- Revolving financial benefits and learning around life events;
- Including employee family members in financial benefits;
- Considering different ways to educate various generations;
- Personalizing financial wellness benefits; and
- Engaging employees all year long.
Does your organization offer any financial wellness benefits? Share your thoughts by leaving a comment below.