Why employers need to take care of their employees’ financial health
On average we spend 1/3 of our lives, 90,000 hours, at work – no wonder it is linked to our general happiness. A recent PwC employee financial wellness survey revealed that 54% of workers are stressed by financial challenges, and 63% of employees say that their financial stress has increased since the start of the COVID-19 pandemic.
Over the past 2 years, the pandemic has shined a light on people’s financial preparedness, and it has given new urgency to how employers are addressing the financial well being of their employees.
Before the pandemic, employer’s benefits mix were focused on the physical and mental health of their employees and included group retirement plans (401k and RRSP). Now, many employers are looking to help address the financial well being of their employees and help them to gain financial literacy with tools and resources that can build their financial confidence and habits that can pay dividends today and tomorrow.
WHAT CAN COMPANIES DO?
By increasing financial literacy in the workplace this can greatly benefit employees as it can help to relieve stress (as money worries are the number 1 source of stress), increase worker productivity, aid in recruitment and improve employee overall satisfaction.
An employer financial literacy program can help employees
· Learn how to budget effectively
· Prepare for retirement
· Learn how to pay off debt
· Learn how to save for a home purchase of save for a child’s higher education
· Learn how to invest
5 STEPS EMPLOYERS CAN TAKE TO HELP EMPLOYEES ACHIEVE FINANCIAL LITERACY
When it comes to personal finances 87% of employees are looking for help and they are looking for a trusted source for tools and guidance to help them on their journey – according to a recent PwC survey[1]. For many discussing money is a touchy topic, and often people may be embarrassed to ask for help. By starting an employer financial literacy program, this can be a integral part of your workplace benefits package and will be worth the investment.
Here are a few ways to create a financial literacy program at your organization
1- Gauge employee financial literacy with a quiz that can help pinpoint where people need more clarity or assistance, and this can help the organization to develop tools that are tailored to their employee needs
2- Connect with the health provider to review their benefits package, and collaborate with them to build awareness of a literacy program
3- Work with an financial consultant or agency to develop and roll the financial literacy/wellness program. This can start as a monthly group session (virtual or in -person) to discuss topics such as investing, student loan repayment options, investing for retirement, general savings. This can be in the form of a 60-minute lunch and learn sessions.
4- For those who are interested in more in-depth discussion, work with the financial consultant or financial planner to book 1:1 sessions with the employees. Often this can be an effective way to have a save space for employees to share their concerns, fears, and goals.
5- Consult with various demographic groups in your organization, i.e.: women, LGBTQ+, ethnic minority employees, etc. and discuss what resources and topic they would like to have would covered. Studies show that tailored financial literacy delivers a higher attachment rate to programs.
The benefits of an employee focused financial wellness program can empower employees to improve their financial situation. And employees that are less stressed are more productive and more engaged in their work; this is not only good for the employee’s health and happiness, but also for the health of the company – which is good for everyone.