How financial wellness benefits can impact the health of your employees
Financial wellness benefits are attracting more and more interest from employers, but before presenting this offer to your organization, it is important to identify why you want to make this investment in the first place.
One reason to consider is the impact a financial wellness program can have on the health of your employees. You may be wondering, “Wait what? What do my employees’ finances have to do with their health?” That’s a good question, and that’s exactly what I’m going to address in this article.
Yes, it’s true. Financial wellness benefits can have a significant impact on the health of your employees, especially in these three areas:
I know this one seems obvious, right? But bear with me. There are a lot of misconceptions about the role and impact of financial benefits for well-being, and I want to take the time to explain how they can improve financial health and why they are better than other benefits. financial.
When a person is in poor financial health, they cannot manage, take action, or prepare for their current and future financial needs. This can lead to insecurity, anxiety, and stress about their financial situation.
Unfortunately, the more stressed a person is about their finances, the less likely they are to make informed spending and saving decisions. In other words, breaking the cycle of poor financial health is extremely difficult.
It’s there that you intervene. I imagine that you already offer several financial benefits to your employees. So why bother with any particular financial wellness program?
Yes, a 401(k) is a fantastic benefit, but it only helps with an employee’s long-term savings, which isn’t helpful for the 42% of employees who say they will likely need to use money in a retirement account. for expenses other than retirement. Financial education is also an excellent offer. But it does not connect the dots between knowledge and action.
This is why a comprehensive, holistic financial wellness program is so powerful when it comes to improving financial health. It gives your employees the tools, resources, and knowledge they need, but it also shows them how to take action to achieve their specific goals, usually with some form of one-on-one counseling, such as one-on-one sessions with a healthcare professional. finances.
Your employees recognize the difference too, which is why 53% of employees said they would feel less stressed about their overall financial situation if they had financial wellness benefits.
When asked what causes them the most stress, employees cite financial issues more than any other stressor combined. Yes, more than a job or a relationship, money is the number one factor when it comes to the stress your employees are feeling. This ultimately has a huge impact on the physical health of your staff. Research has found that financial stress can cause ailments like:
• High blood pressure.
• Respiratory symptoms.
• Somatic problems.
• High strain rates.
• Sleep-related problems (insomnia, fatigue, night terrors, etc.).
When the physical health of your employees suffers, your business also suffers. First, the side effects of financial stress lead to lower productivity and increased absenteeism, costing employers an estimated $250 billion a year. You are also likely to see increased health care costs due to the physical side effects of poor financial health.
But there’s good news: Financial wellness programs have been proven to reduce those costs.
A Fortune 100 company implemented a financial wellness program for its employees and found that the average employer health care costs associated with employees who used the benefit decreased by 4.5%. On the other hand, costs associated with employees who have never used the program increased by 19.4%. This resulted in cost savings of $271.50 per employee.
It’s not hard to imagine the impact of financial stress on the mental health of your employees. Having to think about their mounting debt and how they’re going to pay next month’s rent creates a ton of stress and anxiety for most people.
In this context, it is not surprising to hear that 40% of people say that day-to-day money management limits the extent to which they can enjoy their daily life, and 65% feel that their financial difficulties accumulate so much they cannot overcome them. But if you dig a little deeper, the picture is even darker.
Research shows that people with debt have higher rates of mental health issues like depression and anxiety than those without debt. Financial stress is also the second leading cause of suicide after depression.
And it’s not just that financial stress causes mental health issues — often, it can exacerbate existing issues. 86% of people with mental health problems said their financial situation made their mental health problems worse.
But financial wellness programs can help. One study found that 59% of employees using a financial wellness program reported having good mental health, while the rate dropped to 55% for those who weren’t. If you don’t help your employees change their financial situation, these related mental health issues won’t go away on their own.
How Financial Wellness Benefits Can Improve the Health of Your Employees
Financial wellness offers are not limited to finances. The right benefit can help your employees feel more secure in their current and future situation. It can (literally) help them sleep better at night, feel less stressed, and go to the doctor less often. It can also allow them to fully enjoy their lives rather than being burdened with the burden of their debt.
In other words, when you invest in a financial wellness benefit, you are investing in the overall health of your workforce. So if you’re unsure whether or not you should jump on the financial wellness bandwagon this year, ask yourself where your employees’ health is on your priority list. If it is high, you know what advantage to offer in 2022.