Key takeaways
In this article...
What is financial wellness?
With inflation at a 40-year high in the U.S., more companies are offering financial wellness benefits to help employees manage financial stress and develop good money habits.
The U.S. Consumer Financial Protection Bureau defines financial wellness as the ability to:
What is financial literacy?
Financial literacy is a separate but related set of skills that are necessary for achieving financial wellness. Financial literacy entails a range of knowledge and practices for discerning the best financial choices for one’s current and aspirational situation.
Building up an individual’s financial literacy helps them:
Why are financial wellness benefits important?
When employees are stressed out financially, they’re less productive, their absences increase, their job satisfaction decreases, and their health can even be adversely affected.
According to a 2022 PWC survey, financial issues have the most impact on employees’ mental health, which precipitates downstream effects on productivity and job satisfaction. The report also found that employees who say money problems have a severe negative effect on their mental health are six times more likely to say it affects their productivity. Moreover, financial distress has a direct impact on job satisfaction — financially stretched employees are twice as likely to look for a new job.
In many cases, low salaries and/or subpar health insurance benefits have the biggest impact on employees’ financial stress. More than half of Americans, for example, don’t believe they earn enough to be able to save for retirement. Low pay is a valid concern that may lead an employee to negotiate for higher pay or search for a job elsewhere.
However, assuming an employee is compensated fairly for their role, financial wellness programs provide valuable resources that help reduce employee turnover.
4 steps to offer financial wellness benefits
Your company’s financial wellness benefits should reflect your company’s values as well as the unique needs of your employees.
1. Evaluate employees’ needs
Use anonymous survey tools to understand your employees’ financial goals and determine what benefits would be most beneficial. Survey questions may include:
The survey findings may reveal the effectiveness of your current benefits, especially if you use the same survey questions to before and after launching a financial wellness perk. Survey results may also point to potential gaps in current offerings and persistent, unaddressed employee needs.
2. Obtain leadership buy-in
If company leadership isn’t aware or convinced of employee financial wellness as an issue, present the survey findings from the first step and highlight the productivity and job satisfaction benefits that come with supporting employees’ financial well-being.
3. Get started immediately with free programs and resources
With a green light from the leadership team, you can offer resources that target a combination of the following areas:
Some financial institutions and nonprofits offer free resources, such as workshops, tools, and coaching, that companies can use to start addressing the goals and concerns of employees. Free financial wellness resources include:
Additionally, several HR software solutions include financial wellness features that can help streamline this program with other employee benefits. The right constellation of offerings will depend on the needs and life stages of your workforce.
4. Establish metrics for success
After building a program, it’s important to establish metrics for success. A success metric may be the percentage of employees participating in retirement programs or investing in health savings accounts.
Measuring employee stress can be a more difficult metric to capture without prying into employees’ personal financial decisions. Optional surveys let you check in with employees periodically to see if they are experiencing financial stress without being intrusive.
HR software solutions with financial wellness benefits
Some HR software includes financial wellness features and programs, so there’s no need to invest in a separate, standalone tool.
Moreover, sometimes employees aren’t aware of the range of benefits available to them. Having an integrated employee financial wellness solution increases its visibility to employees when they log into their self-service portal.
Employee wellness benefits that are built into HR software solutions also mean that HR teams can more easily monitor and analyze how employees use these benefits.
Gusto
Gusto is an online HR software that offers financial wellness features as part of its plans. With 401(k) retirement plans, 529 college savings, and automatic savings plans, companies can help their employees reach long-term financial goals and achieve peace of mind.
More than half of Americans (56%) don’t have enough in their bank accounts to cover an unexpected $1000 expense. To address this, Gusto also offers the Gusto Wallet app, which allows employees to borrow against their paychecks at no extra cost to them or the employer in case of surprise expenses.
LearnLux
LearnLux is a learning management system focused on financial literacy and well-being. It provides lessons and tools to help employees gain a better understanding of 401(k) plans, learn more about homeownership, and explore the effects of credit card debt, as well as many other topics.
HR teams can also use the tool’s dashboard to see how employees are engaging with the software. This helps get a sense of LearnLux’s effectiveness in addressing employees’ particular financial wellness needs.
Gradifi
Gradifi is a standalone financial wellness tool that helps employees pay down debt and work towards their future goals.
One interesting aspect of Gradifi is the option to offer student loan repayment as a benefit. With Gradifi’s Student Loan Paydown option, an employer directly contributes a set amount toward an employee’s student loan servicer. With the average student loan debt in America at $40,339 per person, offering help with student loan repayment could significantly ease employee financial stress.
Enrich
Enrich offers financial wellness resources and services to support employers who want to provide financial literacy and measure the efficacy of their financial wellness programs.
The platform can be customized to measure company-specific goals, such as increasing 401(k) participation or decreasing employee stress. It provides robust reporting tools so that HR can measure ROI for a company’s financial wellness program. A clearer picture of a financial wellness program’s ROI informs decisions about whether to add or reduce financial wellness program offerings.
Are financial wellness benefits right for your company?
Employee financial wellness is an important part of a holistic approach to employee health. Employers who offer financial wellness programs help reduce employee stress and demonstrate that the company is invested in their health and well-being. In turn, employees who are financially secure are more satisfied at work, more productive, and healthier.
Explore our HR Software Guide to find the best solution for your organization that includes financial wellness.
About the author
Featured partners: HR software
1 Rippling
Rippling is the first way for businesses to manage all of their HR, IT, and Finance — payroll, benefits, computers, apps, corporate cards, expenses, and more — in one unified workforce platform. By connecting every business system to one source of truth for employee data, businesses can automate all of the manual work they normally need to do to make employee changes.
2 Paycor
Paycor’s HR software modernizes every aspect of people management, which saves leaders time and gives them the powerful analytics they need to build winning teams. Paycor provides a full suite of HCM solutions with a single source of truth for employee data, so users never have to switch platforms, log-in to multiple systems, re-key data or open multiple spreadsheets. Everyday processes become simplified, allowing organizations to focus on their most important work.
3 Deel
Deel's full-suite of HR tools allows companies to manage the entire employee lifecycle—from recruitment and onboarding and beyond—in 150 countries. All this from a single, easy to use interface. US and Global Payroll allows you to pay any type of worker in 100+ countries, and all 50 states, in whatever currency you choose. And with 200+ in-house legal experts and entities in 120+ countries, using Deel means you’ll always be compliant with local regulations.
