According to a May 27 article in BenefitsPro.com by Mark Roberts, a new study about wellness just published by Aon Hewitt shows that employees are keenly interested in financial wellness. More employers are concerned about whether their workers are saving enough, and not just for retirement. The report indicates that more than 90 percent of 250 large employers said they want to introduce or expand their financial wellness programs in 2015.
Employers are concerned about their workers reducing financial stress and improving productivity. There’s no question that money problems stress people out. Nearly 25 percent of employees say their finances have been a distraction at work, according to accounting firm PwC’s 2014 study of financial wellness programs. And Americans have named money as their top source of stress every year since 2007, when the American Psychological Association started reported findings in its survey called “Stress in America.”
In the BenefitsPro.com article, Bob Harris, director of financial wellness at Waddell & Reed, a Kansas City, Kansas-based asset management and financial planning firm said about financial wellness: “It’s something that most employers are considering as an important part of their overall wellness program.” Harris also says, “It doesn’t matter how much money you have. What does matter the most is the decisions you make with that money.”
Employers have widely accepted health and wellness programs, which benefit employees and employers alike, according to Prudential. Like health and wellness programs, needs-driven financial wellness programs promise to benefit employers as well as employees. The opportunity is great. Employers have a real opportunity to help improve their employees’ financial health through targeted, needs-based financial wellness programs, which educate employees about the financial risks they face and provide the tools they need to help manage them.
Offering a broad array of insurance programs to employees can be an important component of that effort. Life, disability, critical illness, accident and other insurance programs, paired with medical insurance, can address many of the financial risks employees face every day. Needs-based financial wellness programs can improve on conventional approaches to promoting employee welfare. Employers need to have more available to their employees than just insurance products to address financial needs.
The Department of Labor places the fiduciary obligation on employers to provide their employees with an unbiased financial education. Great companies have long understood the value of providing financial literacy education to their workers. When workers are in a state of financial wellness, they are in control. They are confident, focused and have a greater balance of finances and security. By offering employee financial education, an employer is making an investment in their business.
Consider these facts from the National Institute of Personal Finance Employee Education which Roberts cites in the BenefitsPro.com article:
- 90 percent of the nearly 128 million workers in the US have difficulty managing their money and are not consistently saving for retirement.
- Up to 50 percent admit to wasting 21 hours per month while on the job dealing with personal money matters.
- Two–thirds say they “have trouble paying their bills on time and worry about money.”
- Employees regard financial stress as their No. 1 concern, 5 times greater than personal health.
Roberts says at the end of the day, the vital characteristic most notably missing but definitely needed is engagement. Employees need to engage in participation — discussion of financial needs with HR, participation in “town hall” benefits discussions, and active use of the various financial wellness tools made available to them. Changing attitudes and behaviors on all fronts requires engagement in the overall process by all stakeholders. Otherwise, companies and their workers may continue to be both physically and financially sick.