Survey after survey suggests that your employees are struggling financially. In fact, the 2021 PwC Employee Financial Wellness Survey1 found that not only are finances the top cause of employee stress, but it causes more stress than jobs, health, and relationships combined.
A 2021 FINRA study2 looked for the root cause of financial stress.
Although data suggested many factors contributed to financial stress – including the pandemic, low income, family circumstances, and social pressures – poor financial literacy was the key.
Those with low levels of financial literacy were prone to poor financial behaviors which led to high levels of financial stress.
An RIA study3 found one particular “habit” in two out of five Americans surveyed: fake it until you make it. In other words, despite having no idea what they are doing when it came to finances, they pretend they do and hope for the best.
What Are They Faking?
Surprisingly, those surveyed have trouble with some of the most basic financial terms. The study found that the top five topics misunderstood included:
- Stock market
- Difference between stocks and bonds
- Doing taxes
- Retirement savings
However, even with terms that were the most understood (401(k), FICO score, adjusted gross income, compound interest, and escrow), between 50% and 60% of those surveyed still didn’t know the meaning.
The survey also found that 67.2% felt uncomfortable and unwilling to learn when they didn’t understand financial terminology or lingo.
When it came to personal financial practices, those surveyed didn’t understand such things as:
- Creating a budget (86%)
- Opening a savings account (90%)
- Creating emergency savings (83%)
- Finding a way to save (65%)
Where to Go For Answers?
Thankfully, your employees want to feel more confident. However, they don’t know where to turn for help. The study found that:
- 74% prefer to learn on their own but don’t know where to start
- 42% believe they cannot afford to ask a professional for help
- 40% are too embarrassed to ask for help
- 39% don’t know where to find the help they need
- 45% feel that their family and friends know more than they do
- 48% want to learn more so they can help their children learn
This is why it is so important to offer a financial wellness program as an employee benefit.
Although many benefits are simply used to attract and retain employees, a financial wellness program can actually affect your company’s bottom line.
The Employee Financial Wellness Benefit
An employee financial wellness benefit will teach your employees the skills they need to take control of their personal finances and improve their financial health. This understanding brings less stress and more life satisfaction.
But what will that do for your company? Here are a few things to consider. Higher financial literacy and wellness leads to:
- Increased productivity – stress costs companies approximately $300 billion a year in lost productivity4.
- Lower healthcare costs – financially stressed employees are 11x more likely to lose sleep and 75% more likely to experience physical symptoms related to stress. Additionally, over half say they avoid getting the healthcare they need due to worries about the cost5.
- Less absenteeism and presenteeism – Absenteeism costs companies $3,600 per year for hourly workers and $2,650 for salaried workers6.
- Higher employee retention and loyalty – 72% of employees would consider leaving a company for one that offered better financial wellness benefits1.
- Fewer on-the-job accidents – Between 60% and 80% of on-the-job accidents are caused by stress-induced issues7.
The Enrich financial wellness benefit offers employees the information they need in the way they need it.
Those who wish to learn on their own will have accurate information at their fingertips in a multimedia format. Those who want to speak to a financial counselor can have access to one without the worry of cost. And everyone will find personalized information to help them with their specific needs and issues.
1 - https://www.pwc.com/us/efwsurvey
2 - https://gflec.org/wp-content/uploads/2021/04/Anxiety-and-Stress-Report-GFLEC-FINRA-FINAL.pdf?x85507
3 - https://blog.riamoneytransfer.com/en/financial-literacy-personal-finance-survey/
4 - https://www.healthadvocate.com/downloads/webinars/stress-workplace.pdf
5 - https://resources.salaryfinance.com/hubfs/Inside%20the%20Wallets%20of%20Working%20Americans%20-%20The%202nd%20Annual%20Salary%20Finance%20Report.pdf
6 - https://www.circadian.com/blog/item/43-shift-work-absenteeism-the-bottom-line-killer-html
7 - https://safetymanagement.eku.edu/blog/work-related-stress-on-employees-health/