Financial wellness programs can help improve business profitability
Businesses suffer nearly $250 billion in lost wages each year because employees are distracted at work with personal financial problems1. This is a staggering challenge to say the least, but one that they don’t have to face alone. Financial advisors have an excellent opportunity to help their clients roll out financial wellness programs, which have been shown to alleviate employee stress and restore productivity. In the long term, these services can also reduce delayed retirement and improve engagement and retention.
The current state of employee financial wellness
To better understand the fiscal health of employees and what kind of financial wellness programs would be most impactful, ADP and its research partner, SourceMedia Research, surveyed 1,028 workers2 and found that:
- Income level drives perception of financial security, but employees at all income levels share similar long- and short-term goals.
- Financial stress is felt most acutely by workers at the lowest income level, but no income bracket is immune from financial stress.
- Employees are aware of different types of savings vehicles, but they need help optimizing their benefits.
Qualities of successful financial wellness programs
As the research suggests, all employees, but especially those that struggle with basic monetary challenges, need financial wellness. Financial advisors can provide such an invaluable service and at the same time, demonstrate to business clients that they know what it takes to help them achieve greater success by:
- Focusing on a broad range of financial advice, not just retirement planning. Many consumers at the lower income range may need help with short-term financial goals, such as debt elimination and building emergency savings first.
- Walking employees through periodic financial reviews with a special focus on successes, no matter how minor. This helps them see progress toward their goals and provides encouragement to adopt even more positive financial behaviors in the future.
- Creating financial content for employee-facing communications that runs from basic to sophisticated. Some employees may crave complex investing strategies, but others may need lessons on budgeting and student loan management.
- Demonstrating the value of health savings accounts (HSAs). Not only will all employees see tax savings, but HSAs also help them build a pool of assets to pay unexpected medical bills.
- Helping business clients design retirement plans with automated features. This can increase participation rates among employees who don’t traditionally save for retirement, unless they opt out.
For more information, download our insight on The Power of Financial Wellness.
1Mercer, Inside Employees’ MindsTM – Financial Wellness, Volume 2 – 2017
2The study drew respondents from a variety of age groups and income brackets. All respondents were at least 21 years old and worked either full or part time.