By Amy Shabacker Dufrane
Core to the relationship between an employer and employee is compensation. In most cases, it’s the primary reason employees join and remain at an organization. While it sounds simple, savvy employers have learned there is far more to employee compensation pay than the paycheck. Financial wellness is what employees really strive for because when their finances are in order, they can achieve their personal and professional goals. Overall stress is reduced, life productivity increases, and relationships improve. Yet, anything related to money seems intimidating, especially given the jargon, fees, and commitment behind traditional financial advisors.
Financial stress seeps into every aspect of an employee’s life. Employees who might already be living paycheck-to-paycheck are thrown for a loop when an elderly parent needs expensive medical treatment, or college payments are looming for a child. There are other trigger events that make people want to get professional financial advice, such as getting a divorce, getting married and merging finances, buying a house, and preparing for retirement. There can also be smaller events like receiving an inheritance, having one’s home flooded in a storm, or when a child needs additional learning resources.
Financial stress – and its corresponding anxiety – can be disruptive in the workplace as well. A 2023 study by PwC shows that “financially stressed employees are twice as likely to look elsewhere.” The same survey uncovered that 73 percent of financially stressed employees say they would be attracted to another employer that cares more about their financial well-being. A recent study from John Hancock shows that financial stress among employees can cost you more than $2,400 per employee in absenteeism and loss of productivity. When stress is alleviated, it can help employees become less distracted and more engaged. Bringing financial wellness resources into the employee benefits aspect of compensation makes them top-of-mind and easily accessible.
With the reality of stress diminished, there are other hurdles to manage. Employees want to know they’ll be okay to plan ahead financially without fear of being sold a bunch of products or forced to have someone manage their investments for them. Despite the current emphasis on chatbots and AI, comfortably asking fundamental questions like how I qualify for a car loan is best achieved when there’s an empathetic human involved in the process. And knowing you have a block of hours that you can use for these types of financial inquiries as an employee benefit – without an obligation to invest – can change lives.
Going back to the PwC study, 60% of full-time employees are stressed about their finances. That’s even higher than the number who were stressed about finances during the height of the pandemic. Even among employees earning $100,000 or more per year, nearly half (47%) say they are stressed about their finances. This same study revealed that financial stress has had a negative impact on sleep (56%); mental health (55%); self-esteem (50%); physical health (44%); and relationships at home (40%). Without a financial wellness offering in the suite of employee benefits, it’s like taking one step forward and four back, eradicating the positive contributions of other benefits being offered.
Here at HRCI, we’ve leaned into providing financial wellness to our employees through a provider named FearlessFinance. There is no better endorsement of its effectiveness than the words of one of the program’s participants. She commented on the compassionate, non-judgmental way they helped guide her when tackling a large, unexpected expense alleviating her money management fears. By developing a clear action plan, the immediate issue was resolved, and confidence was created, empowering the employee to take control of her financial future. Best of all, the value of this employee benefit was readily recognizable, and distractions diminished.
With each new year, there’s a chance to press reset, and finances loom large on that list of resolutions. Helping employees bring their whole selves to work by rewarding them with new skills, new levels of support, and added resources improves retention and engagement. Healthy lifestyle benefits create winning teams, and that’s an HR gold standard.
