Millions of Americans are only $400 away from a personal financial crisis. In fact, as many as 25 percent of adults lack retirement funds and cannot afford health insurance. How is this possible during a time of a strong economy and a solid job market?

One of the main reasons is that many employees lack benefits that are relevant to their current financial situation. However, new financial wellness research is helping brokers and employers correct this issue, so personal finance can be one less worry for employees.

Financial Wellness Research

Recent research conducted by the Financial Finesse Financial Wellness Think Tank has revealed a useful means of predicting the ROI of benefit programs within the workplace. To calculate the predictive model, researchers examined how employees’ financial behavior improves alongside changes in flexible spending accounts, health benefits, wage garnishments, and absenteeism. The team assessed each individual financial behavior at varying levels of financial wellbeing. Improvements were measured in three specific areas:

• Garnishments: Garnishment fell by a significant amount at each time the employees’ financial wellness score improved. For example, the likelihood of garnishment dropped from 4.80% to 1.84% when an individual’s financial well-being score rose from 4 to 6.
• Absenteeism: Similarly, significant decreases in unplanned absences were noted as financial wellness scores rose. For example, there was a reduction from 13.73 hours to 10.35 hours as their financial wellness score from 4 to 6.
• Participation in HSA and FSA: Employees also raised their contributions to health savings accounts and flexible spending accounts as their financial wellness improved. For example, the average combined HSA and FSA contributions increased from $905.55 to $1,137.50 as each individual’s financial wellness score rose from 4 to 6.

What You Can Take Away from This Research

Not only does improved financial wellness help employees, but can also benefit your company because financially healthy employees:

• Are less likely to borrow money and get trapped in a debt cycle
• Are physically, mentally and emotionally healthier
• Are more engaged and productive at work
• Have lower stress levels and are less likely to take unplanned time off
• Save you money on health care contributions
• Are more likely to plan for retirement

How Employers Can Implement This Knowledge

The research provides valuable knowledge which you can use to help you decide which employee benefits to offer. What’s more, you can provide your employees with financial wellness solutions that do not cost your company anything. For example:

• Financial Literacy: By providing your employees with financial literacy sessions, you can improve productivity and engagement because your workers will have fewer money worries to distract them. Their physical and mental health will improve, which means lower absenteeism. Your employees will also feel that you care about them, which will increase their loyalty.
• Health Savings Accounts: A health savings account works in conjunction with a qualifying health plan. A HSA can help employees by allowing them to contribute tax-free dollars for future medical expenses.
• Flexible Spending Accounts: A flexible spending account can help employees because by reducing their taxable income, it allows them to take home a larger paycheck. Once an employee enrolls in the program, he or she can contribute tax-free dollars to a special account. The money remains there until the employee needs to use it for qualifying medical, vision and dental expenses or dependent care costs. This reduces their overall out-of-pocket expenses.
• Employee Loans: Providing your employees with loan options can prevent them from falling into an endless debt cycle at the hands of predatory lenders. Sometimes, when employees have an unexpected financial crisis, such as medical bills, car repair, or the death of a family member, they do not have the financial security to cover the expense. If the individual does not have a high credit score, they will be unable to borrow the required money from a bank. All too often, this leads employees to turn to predatory lenders who give loans without any check at the expense of high interest rates and fees, leaving employees unable to repay the loan.

You can save your employees from this threat by offering employee loans from TrueConnect. TrueConnect offers eligible employees small loans that are simple to apply for and easy to repay. No credit check is required, and the interest rate is the same for all loans. Employees can apply online and will usually have the money by the next business day. Monthly repayments are automatically deducted by payroll. Eligible employers can offer TrueConnect loans at no cost to the company.

Using This Knowledge to Evaluate the Success of Your Benefits Programs

As an employer, you can evaluate the success of your benefits program in two ways:

• Do a financial wellbeing analysis: Find out if your employees feel more financially stable, if their financial stress is lessened, and if they feel they are benefiting from the programs that you are offering.
• Take a look at your employee data: Examine key metrics like absenteeism and contributions to FSA and HSA. If contributions are up and absenteeism is down, then you know your benefits programs are working.

As a broker, you can use the information from the study to help you narrow down appropriate benefits programs so that you are offering the most impactful perks.

Don’t forget that employee financial literacy plays a big role on the path to financial health. Every employee who takes out a loan with TrueConnect is eligible for six free financial counseling sessions, at no cost to your company. These sessions are intended to promote healthy financial habits, while educating employees on personal finances to ensure their wellness.

Contact TrueConnect today and find out more about how they can help you offer a successful wellness program for your employees to help them reach their financial goals.