Best Practices for a Workplace Financial Wellness Program

As an HR professional weighing the options of a comprehensive financial wellness program for your organization, it is best to review the components of a successful one.

Financial Wellness should be. . .

Easily accessible to maximize engagement by leveraging innovative technology, and integrating professional experts and advice.

Integrated with programs that employees already uses regularly to manage their healthcare, savings and other benefits.

Incorporate a customized and personalized assessment to acknowledge each individual employee’s financial concerns based on their current financial situation, income, short and long term savings, debt-load and insurance coverage needs.

Self-directed so that an employee may engage with the program whenever and wherever they are 24/7 365 days a year, at home or on the job.  Employer-provided financial wellness programs that offer self-directed approaches to financial learning have been shown to improve employees’ financial management behaviors, and increase financial and career satisfaction.

Responsive to an employee’s changing financial situation, including planned and unplanned financial events. A comprehensive financial wellness program will impact the ability of the program to affect an employee’s financial wellbeing holistically, while also contributing to long-term use of the program.

Take a lifestyle and behavioral approach to financial wealth and health that incorporates strategies that encourage regular participation with simple steps to help employees build their financial wellness over time.

Dynamic by offering financial tools, relevant and timely communication, and two-way channels for employees to be able to access personalized information and expert advice.

Focused on risk assessment, anticipating and preventing financial emergencies, rather than responding exclusively to those that already exist. The program should offer tailored financial advice in order to increase participants’ financial security and financial resiliency when faced with a crisis. In doing so, employees are better equipped in the case that a financial emergency

does arise, and may be able to do so with little impact on their job performance and/or absenteeism.

Eliminate barriers and provide the information and access that employees need in order to increase their financial capability.

Visit http://www.getmelius.com to learn more about the most efficient way to financial wellness for your employees.

How HR Can Contribute to Employee Engagement

According to Benefits Pro magazine and a survey by Jellyvision (Harris Poll), employees want financial well-being. In other words, they don’t want to stress about money. According to this survey 86% of employees think employers should offer a program to help boost their financial confidence.1

10 Ways Financial Wellness Helps Your Employees

1) Financial wellness programs help reduce mental and physical stress so employees can focus on their work responsibilities and become more productive and engaged with their colleagues and their goals.

2) Financial well-being has a direct impact on employees health including a reduction in migraines/headaches, insomnia, high blood pressure, heart attacks, stomach ulcers, muscle tension, severe anxiety and depression.2

3) When combined with other corporate wellness benefits, financial wellness fosters workplace communication, harmony, happiness and a more holistic and healthy lifestyle.

4) Financial wellness helps employees understand the key financial risks they face everyday and give them the best tools to manage those risks. This includes loss of income due to illness, injury or premature death.

5) Helps employees build individual self confidence and flourish with a sense of financial well-being that has a direct impact on their individual performance at work, family and future.

6) Become more mindful of important tasks like reviewing insurance coverage, beneficiary designations and understanding tax implications of investments.

7) Financial education helps employees increase contributions to retirement accounts like a 401K plan, while paying off credit card balances and saving for unexpected emergencies.

8) Reduces stress related illnesses and as a result out-of-pocket health care costs.

9) Gives employees guidance and a plan to put them on track to meet future financial goals, like saving for a wedding or college while helping them with daily financial behaviors in order to make informed decisions and create strong financial plans.

10) Creates better financial habits for life and has employees embracing the fact that financial well-being is a series of daily spending and saving rituals that when practiced can lead to a more secure future.

1http://www.benefitspro.com/2015/10/12/employees-want-financial-wellness-programs-private

2 http://www.financialfinesse.com/wp-content/uploads/2014/07/ROI-Case-Study-08012013.pdf

Why Offer Financial Wellness in the Workplace?

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/

6 http://www.fa-mag.com/news/employer-financial-wellness-programs-create-new-work-for-financial-advisors-21138.html

7 http://www.benefitspro.com/2014/09/29/save-3-on-every-1-spent-on-financial-wellness?t=cost-containment

Additional research from –

http://files.consumerfinance.gov/f/201408_cfpb_report_financial-wellness-at-work.pdf

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