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Why Employees Need Financial Wellness Services
Many companies have employees who experience a decline in output. This decline in performance might be caused by physical and mental health issues, lack of focus, or a decrease in commitment and morale. But can all of these problems be traced back to a single source? In many cases financial insecurity can be a major source of stress, crippling an employee’s productivity. This issue is highlighted by the PWC 2017 Employee Financial Wellness Survey:
Employees who are stressed about their finances are both less productive and in worse financial shape than other employees. Some of the differences include being nearly five times more likely to be distracted by their finances at work (48% vs. 10%), twice as likely to spend three hours or more at work dealing with financial matters (50% vs. 26%), and three times more likely to spend five hours or more (20% vs. 7%). Stressed employees are also twice as likely to miss work on account of their personal financial issues (16% vs. 8%) and more inclined to cite health issues caused by financial stress (35% vs. 20%).
This is why it’s necessary for organisations to have a financial wellness program. A financial wellness program can offer you many benefits including:
Better understanding of financial literacy
Many individuals, regardless of their education, their culture or the country they live in, only have a basic understanding of how to handle their finances. For example, many people don’t understand how their credit card works, the costs associated with their insurance or the steps they need to take to avoid debt. And to make things worse, “More than half of households have less than one month’s worth of income in a readily available savings account, far from the six-month emergency fund many experts recommend. … In fact, almost 30% report having a zero balance, and 62% have less than $1,000 in savings, according to a survey by GOBankingRates.com.” Therefore, a financial wellness program is critical and has been shown to improve employee financial literacy, helping employees reduce their stress levels and increasing their overall productivity in the workplace as a result.
Improved monthly contributions towards retirement
A large number of employees struggle to deal with their monthly commitments. Whether they are supporting an elderly parent, have a recent addition to the family or are paying medical insurance excesses, there are many reasons that an individual may be struggling to get by on their monthly income. A financial wellness program can help an employee prioritize or cut expenses where possible so that the employee is able to contribute more towards their retirement.
Access to an experienced financial mentor…
A financial mentor is more than just a financial advisor. A financial mentor is someone who should be willing to provide you with leadership when it comes to improving your financial situation, not just financial advice. This financial mentor should have all the criteria you would expect from any other teacher: a passion for teaching, the ability to really listen, the skill to inspire, trustworthiness and generosity are just a few of the characteristics you need to keep an eye out for in your financial mentor.
…which can be a financial lifeline
If you don’t have your own financial mentor, you may be able to seek the help of one in your organisation’s financial wellness program. A financial mentor can guide you through your current financial situation and help you formulate a plan to deal with your financial difficulties, as well as advice on how to handle any anxiety or stress that arises as part of your financial issues.
Assistance with developing short and long-term financial plans
The financial mentor will also assist you with developing a short and long-term strategy for resolving your financial difficulties. Whether you are looking to finance a new home or need to cover unexpected car insurance excesses. These plans will take your specific circumstances and needs into account so that a custom solution can be developed.
Poor financial literacy is a major source of stress for many people. As an employer, by assisting your staff with their financial difficulties by providing a financial employee benefits service, you are able to reduce these stress levels which in turn has a positive impact on your company by increasing employee focus and productivity.
TrueConnect provides voluntary employee benefits services that offer employees a simple and effective solution for handling their personal finances. Find out more about our employee benefits services here, or contact us today.