How Two Organizations Interpret “Financial Wellness”
Financial wellness programs are here to stay. Here’s the proof:
- 86% of employers characterize financial wellness programs as “important”
- 42% say they offer financial wellness programs
- 19% are in the process of implementing programs
- 19% say they plan to introduce financial wellness programs within the next three years.
Over the last few years, the number of financial wellness programs has been on the rise and this number is only expected to increase over the course of this year. More and more employers recognize the weight they carry in regards to supporting their employees’ journey to achieve financial freedom.
What Does Financial Wellness Really Mean For Employees?
The three main components needed to achieve financial wellness can effectively be narrowed down to:
- Being financially prepared for emergencies (Access to cash when needed)
- Having a plan for the future (Savings)
- Having access to the information and tools necessary to make good financial decisions (Education)
Perhaps more than anyone, employers know the impact that financial stress can have on an organization. By promoting financial wellness in the workplace, organizations can reduce unnecessary pain points such as
- Lost productivity
- Employee engagement
- Negative job satisfaction
Most employers not only recognize the impact well-being has on their company, but they also understand its impact on their employees. In fact, 90% of employers admitted the main motivator to offer financial wellness programs is because “they really care about their employees”.
Every employee has different financial goals, priorities, and obligations. An effective and successful wellness program should offer solutions that can meet an employee’s specific circumstances. 47% of employers stated that it should address an employee’s full financial picture. Employees should be encouraged to meet short-term needs, such as rent or basic expenses, while working towards long-term goals such as retirement.
What’s the Reality of Today’s Employees’ Personal Finances?
Unfortunately, your employees are often unprepared for unexpected financial burdens. This is clear now, more than ever, amidst the Covid-19 pandemic as employees experience lay-offs, reduced income, and unexpected health-related emergencies.
Even before the pandemic, personal finances were a leading cause of stress among employees.
Pre-pandemic, more than 1/3 of full-time employed Millennials, Gen Xers, and Baby Boomers had less than $1,000 saved to deal with unexpected expenses.
PwC’s 9th Annual Employee Financial Wellness Survey, conducted in January of 2020, asked employees what caused most of their stress:
- 54% credited financial or money matters
- 18% stated due to their job
- 12% mentioned their relationships
- 11% brought up health concerns
- 5% said other
Financial problems were already a leading cause of stress. With an economic recession on the horizon and millions of employees unemployed, this stress will only be amplified. In fact, 46% of workers are “extremely” or “moderately” concerned about their household income in response to the pandemic.
Additionally, a survey conducted at the beginning of the pandemic found that the people who were struggling before the Covid-19 pandemic aren’t the only ones financially vulnerable now.
42% of those with household incomes of more than $100,000 reported living paycheck to paycheck this month. More than half (61%) reported their emergency funds will run out before the end of the year.
Personal finances are a concern for many.
What Employers are Doing to Help
This year especially, employers are taking advantage of the opportunity to help their employees overcome personal financial hardships by offering programs that support their employees’ specific financial needs.
Employers know the impact financial stress can have on an organization, and finding ways to implement programs that can support the personal finance endeavors of their employees is a top priority. Both private and public sector employers see the value of offering an employee loan program to their employees.
Here’s how some organizations have prioritized their financial wellness programs.
Signature HealthCARE is a leader in aging and family-based healthcare. Their mission is to radically change the healthcare landscape so their residents can continue to live with purpose. This mission also encompasses the well-being of all Signature HealthCARE stakeholders, their employees. As a result, Signature HealthCARE launched the TrueConnect program earlier this year.
Nick Porter, VP of Total Rewards, shared why Signature HealthCARE decided to implement a financial wellness program, and how it’s been impactful for the well-being of their stakeholders, especially during such a challenging year.
“The more benefits you can offer that really apply to everybody’s daily life, the more valued your stakeholders feel. We provide benefits that are much more holistic in nature. We were looking for a funding source for our employees. Here in the next couple of months, stimulus checks and unemployment are going to dry up. With TrueConnect, we are ahead of the curve and we can avoid people tapping into their retirement plan.”
County of Doña Ana, New Mexico
Located in southern New Mexico, Doña Ana County has a population of roughly 215,000 people. The Doña Ana County economy specializes in Agriculture, Forestry, Hunting, and Fishing, Education Services, and Public Administration. In addition, the county is home to New Mexico State University. Despite the abundance of opportunity for residents to participate in higher education and establish a long-lasting career, poverty has been a historical concern for the community as 24.9% of the population lives at or below the poverty line.
Prior to implementing TrueConnect, Doña Ana County officials provided free empowerment workshops for employees. The intention of the workshops was to provide quality financial and health information so that employees could make informed decisions about their finances, primarily because residents were resorting to payday loans in order to pay basic expenses. As a result, many employees found themselves in a vicious cycle of debt from these payday loans. Although the quality of the information provided in the workshops was helpful, it did not offer a real solution to the problem that employees were experiencing – access to safe and affordable loans.
As a result, Doña Ana implemented TrueConnect. TrueConnect offers employees an alternative to payday loans by giving them access to funds that would otherwise be predatory, expensive, or entirely unavailable, without the need of a credit check.
Julia T. Brown, Doña Ana’s County Manager when TrueConnect was implemented stated,
“Predatory lending practices within Doña Ana County and the State of New Mexico tend to trap hard-working people in webs of debt from which they cannot extricate themselves. The county’s new program will allow our employees a much more affordable option that is designed to help them through hard times while also showing them a workable way forward to pay off the debt and recover financially.”
Time has proven that the program has been extremely successful. Doña Ana implemented the program in 2017, and to date, there have been 938 loans taken out by employees with a total funded amount of $1,562,000.00. Participation in the program is over 120%!
If you would like to learn more about how you can implement TrueConnect within your own organization, contact us today.