BY: R. Brad Knowles, MBA, CBFA,
Managing Director, Argent Retirement Plan Advisors
One of the most rewarding aspects of my work at Heritage Retirement Plan Advisors is helping our clients’ employees grow their savings, achieve investment goals and reduce the stress of managing their money. Over the past year, as the coronavirus pandemic affected our country, we have found how powerful financial wellness programs have been in improving the well-being of our clients’ workforce.
The pandemic certainly took its toll financially and emotionally. In its 2021 Employee Financial Wellness Survey, global accounting/professional services firm PwC found that 63% of employees polled in January said their financial stress increased because of the pandemic.
That stress ends up being a hidden cost to businesses because it leads to lower worker productivity. Research by the American Institute of Stress found that workplace and financial stress costs U.S. businesses $300 billion each year (about $1,685 per employee).
That’s the bad news. The good news is that COVID-19 cases have dramatically decreased during the past several months – and the economy continues to open up and more people are getting back to work. Given that backdrop, here are three key takeaways from the past year about financial wellness plans for businesses and their employees:
1. More employers are offering financial wellness programs
The employer’s role in supporting its workforce continues to evolve. More business leaders (company founders, CEOs and benefits plans executives) recognize the value in taking care of their employees in a holistic manner, i.e., beyond offering health insurance and a 401(k). EBRI/Greenwald Research’s Workplace Wellness Survey found that 35% of employers offered financial wellness programs in 2020 versus 28% in 2018. Additionally, 39% of employees in the survey said such programs “contributed a lot” to their financial security.
2. Companies are offering an array of financial programs and services
We are noticing that more businesses have stepped up efforts to engage their workforce by providing different types of financial wellness programs. The data backs it up. A November 2020 report by PwC, for example, found that 66% of the companies surveyed were offering financial literacy programs, a 12% increase from the prior year. Financial coaching and behavioral management were offered by 59% of the employers (up 9% from 2019) and financial advice was provided by 44% (a 10% increase).
3. Financial wellness programs can improve employees’ lives
Companies that closely track the results of their financial wellness programs are noticing meaningful improvements in their employees’ finances. One client, a well-respected technology company, saw benefits within the first year of the program’s launch – with 972 of the company’s 4,000 employees participating and utilizing online tools and resources. Here are some of the total results during the first 18 months:
- Employees reduced debt by over $1,234,000
- Employees increased emergency fund savings by over $1,192,000
Those employees also became more confident managing their money. Of the 972 employees who are participating, 48% initially said they were either scared or confused about their personal finances – and that dropped to 28% after taking part in the various programs being offered.
Slowly, but surely, financial wellness is moving from a “nice to have” to a “must have” for employers. The investment in financial wellness programs pales in comparison to the economic benefits of your financially fit employees. Maximizing the potential of these programs can help your employees reduce the stress in their lives and provide them with invaluable advice to achieve their financial goals in life.
