Why is Employee Financial Wellness Important in the Workplace?

People at work are there for a primary reason – to earn money. This is an aspect of well-being that will always control the dynamics of a workplace. 

Now, let's look at the things that make people decide to not leave a job. A Harvard Business Review article defines 'inertia' as the thing that makes them stay.¹ Just like the scientific concept, a body (the employee) stays as is if there is no force affecting it. 

This force, as mentioned in the article, can take the form of external factors – including better job opportunities and, importantly, financial stability.

Both sides of the coin involve money, and it's crucial for businesses to recognize the significance of employee financial wellness. This understanding is essential in maintaining a workforce that feels secure and satisfied in their roles.

A Matter of Social Well-being

Financial stability is not just about dollars and cents. It links closely with physical and mental health – and eventually, it impacts social well-being, too. In simple terms, when money worries lessen, stress levels drop. This can allow people to enjoy life more, causing them to have healthier interactions with others.

The Impact of Financial Wellness on Employee Performance

The importance of financial wellness is often overlooked even though Research by Purchasing Power found that 61% who have used their platform’s particular financial solution are more likely to stay with their current employer.² 

This speaks directly to the impact of financial security. It also affirms that financial wellness is important in boosting workplace productivity. In turn, this impacts employee morale and happiness.

Increased Job Satisfaction

The general rule of thumb is that those who support employee well-being enjoy better retention rates. This is one of the best benefits of financial wellness in the workplace. An important aspect is making employees feel confident about their financial situation.

Data from the World Bank supports this, saying that 91% of employers see high satisfaction levels due to wellness programs.³

Reduced Stress and Anxiety with Better Financial Security

The World Health Organization says that stress can cause mental health issues.⁴ It's even one of the main culprits for the retention problem these days. Sadly, money is still a top cause.⁵ 

Experiencing financial stress can disrupt many areas of an employee's life. Aside from its impact on overall health, it can also affect how productive people are at work. 

Financial wellness plays a vital part here. It provides the confidence and assurance needed to tackle these pressures. As employees become more financially secure, they can focus on their tasks rather than worry about money. This lessens the mental health issues stemming from financial worries.

Good news: there's some proof from Enrich's Financial Wellness Behavior Change Data report. In this 12-month study, we found out that, with financial education, stress levels went from 3.33 down to 2.57. This was based on a scale with 5 being the highest stress level and 1 being the lowest.

Improved Focus and Concentration

By addressing the roots of financial stress, organizations create healthier and happier workplaces. The positive effects ripple through their performance and well-being.

Here, it's important to consider the link between financial wellness and brain activity. One study mentions that perceived financial difficulty can worsen one's cognitive function.⁶ Struggles with day-to-day finances can make focusing difficult; think about how hard it is to do your job when worried about financial decisions.

But all hope is not lost. Employees can start saving and building an emergency fund. These steps toward significant financial changes can go a long way toward protecting them from having to worry about an unexpected expense.

Financial Health: A Way to Boost Employee Engagement and Loyalty

One way to attract top talent is through offering comprehensive financial wellness programs. You'll notice this as you focus on employee well-being and their personal finances. With these being your priority, you get to help them make smart choices, leading to other benefits.

Why Offering Financial Resources Matters

A sense of financial security – this is one of the major purposes of financial wellness. Employers can provide it directly in the form of financial resources. You can start by including financial counseling in the benefits package or providing tools for building emergency savings.

The Employer's Role in Promoting Financial Literacy

Aside from financial resources, it's the employer that drives the campaign initiatives. While this may incur some business expenses, it is an investment with incredibly valuable returns.

Providing Educational Resources to Aid Financial Well-being

Employers can start this by offering workshops, seminars, and online resources. Financial experts and financial platform providers like Enrich specialize in such programs. With these, you can pave the way for the financial wellness journey of an employee. 

Better yet, financial education tools promote long-term financial security and financial freedom. 

You can even make a custom program that focuses on individual needs. With personal well-being at the forefront, members get to lead a healthy life. Implementing this approach helps companies contribute significantly to their employees' financial wellness.

Offering Tools and Benefits that Help Achieve Financial Goals

There are certain tools that employees can use for managing money. These can include the following:

• Financial calculators, which they can use for real-life and scenario purposes
• Money personality apps
• Stress analytics
• Money mindfulness resources

These tools ensure that people can observe every aspect of money management. They can cover several topics, like managing debt like student loans, car repair costs, credit card debt, and saving for retirement.

Measuring the ROI of Financial Wellness Programs

Investing in your employees' overall financial wellbeing is akin to doing so for your company. And if you invest, there should be returns. Here are some KPIs you can use to measure your ROI:

• Short-term financial stability
• Long-term goals achievement
• Higher savings rate
• Active retirement planning
• Stress levels
• Credit scores
• Employee satisfaction levels

To be more precise, you can take a look at Enrich's ROI calculator.

Overcoming Common Program Challenges

Like any type of initiative, financial planning and education also have some issues. There's always the problem of resistance from some employees. There's also the issue of financial freedom of choice; people may think you're not giving them the power to decide for themselves.

Here, you should recognize certain financial concerns. You can start by being open and clear with your communication, encouraging everyone to talk about their financial issues during counseling or discussions.

Start Your Journey in Helping Employees Achieve Financial Wellness

Ready to see your employees manage their money better? Get started with Enrich. Our platform is highly customizable, meaning you get to have messaging and web content tailored to your company culture and even branding.

With our primary goal set on financial inclusion and equity, you can easily expand the reach of your programs. Watch our demo video to understand how Enrich can help your employees achieve more.

FAQs About Employee Financial Wellness

1. What is financial wellness?

Financial wellness is the overall state of an individual's financial health. It encompasses financial well-being, financial security, and the ability to achieve financial freedom and long-term financial goals.

2. Why is financial wellness important in the workplace?

Financial wellness is important in the workplace because it directly impacts employees' overall health and well-being. A focus on financial well-being can improve employee health and well-being, leading to increased productivity and decreased financial stress.

3. How can a financial wellness program benefit employees?

A financial wellness program can provide employees with the financial education and tools needed to improve their financial situation and achieve financial wellness, ultimately leading to financial freedom and feeling secure in their financial future.

1 - https://hbr.org/1973/07/why-employees-stay 

2- https://www.webmdhealthservices.com/blog/6-reasons-why-financial-wellness-must-be-an-employee-benefit/ 

3 - https://newsroom.bankofamerica.com/content/newsroom/press-releases/2022/09/bank-of-america-study-finds-84--of-employers-now-say-offering-fi.html 

4 - https://www.who.int//news-room/questions-and-answers/item/stress/ 

5 - https://www.apa.org/news/podcasts/speaking-of-psychology/financial-stress

6 - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5167656/