How to Reduce Employee Financial Stress for a Healthier Workforce... and Bottom Line

This content was provided by the Council for Disability Awareness Member Lincoln Financial Group^®

Employee financial wellness is a hot topic today, and for good reason. A recent survey shows that employees spend five to 13 hours per month worrying about their personal finances while at work. Without the necessary support, employees are more stressed, and thus more distracted. For employers, this translates into a nearly $250 billion loss in healthcare, productivity, and lost wages every year.¹

Some studies show that financial stress, especially in the workplace, is at its highest level in five years.² And, while every employee’s situation is different, many face the same financial stresses – the most common monetary challenges facing employees typically include:

Heavy debt
Vanishing pensions
Retirement savings
High student loan debt
Increasing healthcare premiums
Out-of-pocket health expenses such as deductibles, copays, and coinsurance

How Employers Can Help Employees Reduce Financial Stress

With employees spending the majority of their day at their designated places of work, employers have an opportunity to incentivize change and offer solutions to this population. Employers can help employees better manage their concerns with a mix of financial wellness programs and quality voluntary benefits. Click here for tips to help employees learn about how to build financial literacy.

Financial Wellness Programs

Employee financial wellness programs can help employees find balance and control over their finances, now and throughout their lifetime. Gaining in popularity, these programs have become a key workplace trend in 2017.³ because they can meet the needs of employees by educating them on how to manage and overcome personal finance issues. Some of the more popular financial wellness programs include:

Debt management and reduction
Budgeting tools and resources
Investing and financial market basics
Asset management and saving for home purchase, college, retirement, and other goals.

Employers can approach financial wellness by engaging employees throughout their lives, with a focus on guiding employees towards action. One important objective is to help employees reach their goals for every stage of their financial lives, whether it’s saving for a house, a car, college, or retirement. The key takeaway for these types of programs is to select the right financial wellness program that addresses the specific needs of employees in your business and offer them the resources they find valuable.

Organizations have every reason to want their employees to be financially sound. An effectively designed employee financial wellness program can help employers:

Bolster productivity, because employees aren’t distracted by financial worries.
Drive more predictable workforce flow throughout the organization.
Result in improved physical health (people with high levels of financial stress are more prone to sickness).
Increase employee engagement and retention.
Create more affordable retirement opportunities for all employees and enable career advancement opportunities for younger employees.

Having a clear understanding of the business benefits of financial wellness, integrated within the overall wellness and HR talent/acquisition strategy ensures corporate commitment and is key to a successful financial wellness program.

Voluntary Benefits

As an employer, you understand how employee well-being impacts the workplace on many levels, and will want to ensure it is not affected by financial stress. Not every employee understands the many benefit options that are available to them. Therefore, it is worth investigating ways to help them really understand the benefits your company can offer to ensure they are equipped with the financial knowledge they need.

A thoughtful mix of voluntary benefits can help employees better manage unexpected medical costs associated with a critical illness or accident. That is to say, voluntary benefits plans are easy to implement and cost-effective for employers as the employee typically selects the plan, and pays the premium. Three of the most popular voluntary benefit product offerings are:

Accident
Provides a lump-sum for a wide range of covered accidental injuries from simple fractures to third-degree burns
Critical Illness
Provides a lump-sum benefit if an employee is diagnosed with a covered critical illness
Hospital Indemnity
Provides a lump-sum when a covered illness or injury results in hospitalization

Voluntary benefits offer key advantages:

Most policies are portable
No copays, deductible, or coinsurance
Benefits paid directly to the employee
Employer group rates are generally lower than an employee can purchase separately.

Employers can provide employees with special financing vehicles that may have tax advantages, including: health flexible spending accounts (FSAs) using pre-tax dollars to pay eligible healthcare expenses, dependent care FSAs for eligible dependent care services, and a health savings account to help employees pay expenses in a high-deductible health plan. Your voluntary benefit options send the message to your employees that you’re listening to their concerns and priorities. Get it right, and your benefits dollars will be well spent and will pay off in terms of employee satisfaction and retention. In fact, Sixty-two percent of Millennial and 50 percent of Gen X employees say that their loyalty to their company is influenced by how much the company cares about their financial well-being.² Employers that implement an employee financial wellness strategy and clearly communicate available benefits resources can make a positive impact in the workplace: for employees, and for the company… a win/win.

Sources

[1] Mercer Survey. “Inside Employees’ Minds – Financial Wellness, Volume 2.” 2017. Retrieved from https://www.mercer.com/newsroom/financial-stress-could-cost-us-employers-up-to-250-billion-in-lost-wages-annually-finds-new-mercer-survey.html

[2] PwC. Employee Financial Wellness Survey. 2017. Retrieved from https://www.pwc.com/us/en/ private-company-services/publications/financial- well-being-retirement-survey.html

[3] S Miller. Is 2017 the Year of Employee Financial Wellness Programs? Society for Human Resource Management. Jan. 17, 2017. Retrieved from:
https:// www.shrm.org/resourcesandtools/hr-topics/benefits/pages/financial-wellness-trend.aspx

About Council for Disability Awareness

Council for Disability Awareness has written 478 posts in this blog.

The Council for Disability Awareness is a nonprofit organization dedicated to educating the American public about the risk and consequences of experiencing an income-interrupting illness or injury. The CDA engages in research, communications, and educational activities that provide information and helpful resources to wage earners, employers, financial advisors, consultants, and others who are concerned about the personal and financial impact a disability can have on wage earners and their families.