Financial wellness programs are becoming a more popular employee benefit. One of the reasons financial wellness programs have become so popular is due to how it can impact an employee’s physical and mental health. Employees who have access to financial wellness programs tend to be healthier than those who don’t, according to a Prudential study cited in BenefitsPro. These employees appear to be more productive, less susceptible to illness, less burdened by stress and better able to tackle new challenges/opportunities.
According to Integrity Data, over fifty percent of employers offer some sort of financial wellness program. Both employers and employees report a higher level of satisfaction with their benefit plans when financial wellness programs are also offered. Employer sponsored financial wellness programs, in tandem with health and wellness benefits, may help employees to be healthier overall.
The presence of a financial wellness program in the workplace seems to not only to improve employees’ health, it also appears to reduce employees’ stress levels. Workers who participate in a financial wellness program are more likely to refer to themselves as physically healthy. In addition, 26% of financial wellness program users are likely to report lower levels of stress than non-users (22%).
While financial wellness programs may not have had the universally positive effect that early proponents had hoped, the Prudential Wellness Programs Census report seems to indicate that things are changing. Per the report: “The interplay between physical and financial health suggests that employers who don’t offer financial wellness programs may want to reconsider. Researchers found even small changes in socioeconomic position can impact health risk, with incremental increases in income associated with improved health.”
During 2020, employers are giving serious attention to analyzing financial wellness programs. Unfortunately, almost a third of employees report being distracted by their personal finances at work. Offering financial wellness programs in the workplace could multiply the seemingly positive effects discovered in the Prudential study.
The Prudential report indicates that employers are doing better with health and wellness benefits than they are on financial wellness programs. When employers do offer a health and wellness program, they frequently offer employees incentives for participating. Surprisingly, employees have difficulty equating the reward of putting themselves on a firmer financial footing with participating in a financial wellness program. The connection simply isn’t as clear or easy to understand. Plus, employees are required to do the work to reap the rewards of a financial wellness program. This is not a case of receiving a participation award for enrolling in a health and wellness program.
According to the Prudential study, employees would like employers to provide one or more of the following benefits, though some are not currently widely available in financial wellness programs:
- Accrued wage Advances
- Identity theft protection
- After-tax emergency savings accounts
- Financial coaching services
- Online financial management tools
- Digital financial advice and planning
- Financial education classes
- Low-interest loans
- Debt consolidation/payment programs
Simply offering a financial wellness program does not automatically equate to employees successfully achieving their financial goals. There needs to be accountability built into the financial wellness programs. Participants are less likely to reach their goals in the absence of accountability. Periodic meetings or calls with a financial advisor are tremendously helpful in moving the needle for employees who participate in financial wellness programs.
If an employer-organization currently doesn’t offer a good financial wellness program, or if that benefit could stand to be more robust, consider updating your plan, talking to your current retirement plan advisor, or a Certified 401k Professional (a C(k)P) about making positive changes. Doing so could improve your employees’ financial well-being and their overall health.
To register for a Webinar on The Future of Financial Wellness, CLICK HERE. The Webinar is scheduled for Friday June 26, 2020 at 1:00PM ET.
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