People often discuss Employee Financial Wellness Programmes in relation to the benefits they yield for companies that provide financial literacy supports to their staff. I myself wrote an article on this topic recently. Click here to read ‘Why Employee Financial Wellness is Important for Your Company’.
At the core of these discussions is the premise that employee financial wellness is conducive to corporate wellbeing. This is akin to other areas of employee wellbeing. It boils down to a simple equation: Less stress for employees = less absenteeism and greater productivity.
However, what can be lost in these accounts is the impact Employee Financial Wellness Programmes can have for the individual employee. Thus, in this post I want to balance the macro with the micro. Rather than addressing ‘Employee Financial Wellness’ as a corporate strategy, I will discuss ’employee financial wellness’ as an individual, personal concern.
Employees can enjoy 5 direct personal benefits of Employee Financial Wellness support schemes. Let’s take a look.
1. Employee Financial Wellness Improves Physical Health
There’s a connection between employee financial health and physical health. Stress. The American Psychological Association’s 2016 Stress in America Report found that 67% of those surveyed revealed that money is a somewhat or very significant source of stress. This was up 2% from 2015. Conversely, the Association found that a rise in stress has led to a rise in “stress-related symptoms and poor health.”
While there is no corr
esponding research in Ireland at present, the team have encountered this problem over their many years of experience. Our customers regularly blame financial malaise for stress-related health conditions.
Compounding the problem that employee financial stress poses for an employee’s physical health is the financial cost of healthcare. Some individuals will avoid treatment or health-care check-ups in order to avoid costs. In such cases employees run the risk of escalated health problems further down the line or missed early stage diagnosis.
Employers who provide employees with financial wellness programmes can help to reduce the negative impact that financial stress can have on an employee’s physical and mental health.
2. Employee Financial Literacy Supports Help to Clarify Confusing Financial Topics
There is a lot of noise and confusion for employees when interacting with the financial services sector. Employees who are looking for information on how to effectively manage their finances can find this overwhelming and daunting.
Young employees may require independent financial advice on student debt management. Another topical area for this group is how to negotiate a mortgage for their first home. Personal financial management is an essential life skill that is not taught in Irish schools. For the younger demographic who are new to the workforce the provision of Employee Financial Wellness training helps to fill this gap in financial education. It can be an invaluable support.
Older employees also benefit from financial wellness programmes as their families grow and they reach certain milestones in their life. For example, they may want to check that they are managing their personal finances effectively and planning correctly for their future. Employee Financial Wellness Programmes help these individuals to identify financial savings, opportunities and solutions.
You can read more about life-cycle stages for employee financial wellness here.
3. Employee Financial Wellness Education Protects Employees
Let’s face it, life throws up curveballs. Employees who don’t have contingency funds in place to cover the cost of emergencies are at risk of making bad choices. These can have a detrimental effect on an employee’s long-term financial wellbeing.
Take health cover for example. Health insurance doesn’t always cover the full cost of treatment. It may run out after a set period of time. Furthermore, Employees may be required to pay upfront and claim for reimbursement.
Employees who make solid financial preparations reduce the risk of acquiring ad-hoc debt with unfavourable interest terms. Reactive decisions such as these can damage and employee’s prospects for long-term financial prosperity.
Employee Financial Wellness Programs can provide employees with the information and budgeting support required to effectively plan for life’s ‘what ifs’. Employees benefit from peace of mind and a secure financial position from which to face emergency situations.
4. Employee Financial Wellness Programmes Help Employees Plan for Retirement on Their Own Terms
Life expectancy in Ireland continues to rise and this means that retirement periods are far longer than they once were. Employees need to make informed decisions about their pension and planning for their retirement.
Employee Financial Wellness Programmes for Irish workers can put the future squarely on the agenda with individuals benefiting from independent advice. Employees are empowered to make right decisions for them and their families and take control of their retirement.
5. Employee Financial Wellness Programmes Engender A Sense of Community and Wellbeing
The simple act of providing support in the form of Employee Financial Wellness education elicits a sense of being cared for by one’s employer. Individuals who believe their employer cares about their personal wellbeing feel secure. They feel nurtured by their employer and part of a wider community. Consequently, they are happier in the workplace.
So there you have it, a people-first view of Employee Financial Wellness! If you would like to add a benefit from your own experience please feel free to leave a comment below.
Meanwhile, if there is any topic on Employee Financial Wellness that you would like to see explored in this blog then feel free to get in touch. And Finally, don’t forget to sign up to our newsletter for more insights.
Nick Lawlor, Managing Director, Employee Financial Wellness
