57% of employers agree that offering financial education to employees has a positive effect on productivity.1
Over the past decade or so, employers have seen health and wellness programs benefit their organization with fewer absences and less demands on employer-sponsored health insurance. Now employers are embracing a new type of wellness program – financial wellness.
$70 Billion in 401(k) Loans
24% of employees say that personal financial issues are a distraction at work. 39% say they spend three or more hours each week thinking about or dealing with issues related to their personal finances. 4 A shocking number of workers are even misusing their 401(K) with one in four workers resorting to taking out 401(k) loans each year to the tune of $70 billion, nationally. 2
Proper Guidance Helps Build a Stronger Workforce
Most employees need help with more than just their retirement plans. They are looking for recommendations on how to manage all areas of their personal finance, from debt and cash flow management to the proper insurance coverage. With the proper guidance that provides daily steps to take to improve their finances, employees feel empowered and become more productive workers.
Financial Distress, A Distraction for HR
Employees who have poor financial habits can’t meet their obligations or plan for the future. They become worried, stressed, sick, anxious and possibly depressed. In turn, employee morale and job productivity are reduced and the result is an increase in absenteeism, tardiness, lack of focus and commitment. Their financial distress affects their performance at work. Meanwhile health insurance costs increase as may substance abuse. Other health concerns include on the job irritability, fatigue and sleeplessness. These stressed-out employee behaviors then become distractions for HR.
Employees Welcome Financial Wellness
To alleviate these stresses, an increasing number of employers are implementing financial wellness programs that educate employees about the financial risks they face and provide tools to help manage those risks. 3 Financial wellness results from making informed short and long term financial decisions that result in optimal health, productivity and a solid foundation for every state in life. Financial wellness can produce a state where employee stress is gone and actions are put in place to support financial goals and workplace performance.
Financial Wellness providers like SimpleFi report that employees are lining up for financial advice.5 Unfortunately, not everyone knows how to handle their personal finances on their own, especially given the lack of education in schools and the finance and insurance industries lack of transparency, making understanding finance and risk management a very difficult task to handle. According to Financial Advisor magazine a recent survey has shown that 60% of employees want one-on-one financial planning assistance from their employer.
The CFBP cited research in its report that seven out of 10 Americans claim financial stress is the most common type of stress they experience. According to the report human resource managers are noticing the effects of financial stress. Sixty-one percent of HR professionals blame financial stress for negatively impacting work performance; 22 percent said financial stress has a “large impact” on employee engagement. “Financial wellness programs are not something employers are promoting just because they want to be good corporate citizens,” said the CFPB report. “Large and small employers are beginning to think about financial wellness programs at work because it makes sense to do so.”
Financial Wellness programs come in many different forms and new companies are launching every day. Melius is a more proactive and holistic approach to improving financial health that encourages daily changes in spending and saving behavior while helping workers break the feast or famine cycle of living paycheck to paycheck.
RSVP for a demonstration today at www.getmelius.com
Footnotes
1Metlife’s 12th annual US Employee Benefits Trends Study
2 Bank of Nevada Leavitt Group present “Workplace Financial Wellness: The Critical Need for Employee Financial Wellness”
3http://research.prudential.com/documents/rp/financial-wellness-the-next-frontier-in-wellness-programs.pdf
4 PricewaterhouseCoopers, “Employee Financial Wellness Survey,” 2014, page 11.
5 https://www.simplefinow.com/employees-want-it-heres-how-to-get-it-workplace-financial-wellness/
Additional research from –
http://files.consumerfinance.gov/f/201408_cfpb_report_financial-wellness-at-work.pdf
financialwellness.live 