Employee benefits have long been a staple of a competitive compensation package. Health insurance sits at the center, supported by life insurance, paid time off, employer-sponsored retirement plans like 401(k)s and, more recently, mental health benefits.
Those categories have defined what “supporting employees” beyond salary looks like. But many employers are recognizing the need for another benefit that leads to stronger workforces and reduced employee turnover.
Financial wellness support is becoming increasingly recognized as a health benefit in employee compensation packages across industries. It doesn’t reflect a change in the employees’ financial situation through higher wages or additional overtime opportunities, but helps employees manage financial stress through education, tools and a structured support system.
The Hidden Burden
Many employers have recognized a strong need to help employees manage financial challenges because financial stress is showing up as a health issue inside the workforce. Society of Human Resource Management (SHRM) data found that 83% of HR professionals say employees’ personal financial challenges have a negative impact on work performance. That financial stress trickles into the workplace in the form of higher absenteeism, reduced focus, lower engagement and emotional disconnect.
To compound the issue, the Employee Benefit Research Institute (EBRI) found that half of workers report at least moderate concern about their financial well-being and three quarters of those respondents say that debt is a problem in their household. The numbers indicate that the level of financial strain doesn’t affect a small segment of employees. Rather, it is a widespread issue across workforces throughout a number of industries.
For many employees, personal finances remain a private matter, sometimes with feelings of embarrassment or vulnerability. This makes them less likely to be discussed in the workplace.
When money issues become a constant stress, it can start to function like other health burdens. Many national and international health organizations note that chronic stress can contribute to high blood pressure, digestive issues, sleep disturbances and weakened immune systems.
More than Money
How employees manage their finances was once a personal responsibility. What was happening outside of the workplace was a separate issue from what employees were responsible for at work.
But that view has been shifting as employers recognize that employees can’t leave personal stress at the door. Financial wellness support adds another layer of support that helps bridge personal and professional lives. Today, several employer programs supporting financial literacy are being implemented in industries from construction to manufacturing to healthcare.
Some are offering financial coaching and access to educational tools. These programs give employees access to guidance on budgeting, debt management and long-term financial planning. It serves as real-time, practical help with everyday decisions that contribute to stress. These programs can be positioned as quarterly or annual professional development seminars led by experts and supported with simple online tools to help employees with continuous learning and support throughout the year.
Other employers are developing emergency savings and financial resilience programs. Unexpected expenses are often what push employees from financial stress to financial crisis. And oftentimes, it is just concern that a crisis could occur that affects the physical health of employees. To ease the stress, some employers are offering help in the form of payroll-linked savings tools to help employees more easily create a buffer so that a car repair, medical bill or family emergency does not immediately spell despair for employees.
A New Benefit Taking Shape
Financial wellness support in the workplace is still evolving as employers recognize that personal employee financial health links wellbeing, performance and retention.
As financial stress affects a large share of the workforce, employers are likely to expand these programs as an acknowledgement that well-being at work matters to the bottom line, but even more importantly, to the people whose talents, ideas and efforts drive organizational success every day.
