Conventional wisdom once held that an employer’s concern about the personal finances of their employees should extend no further than the issuance of timely paychecks and retirement account management.
As more information has become available regarding how much financial wellness can affect a person’s anxiety, health, concentration, and family life etc. - which in turn can have significant impacts on company operations, efficiency, and productivity - there has been a noteworthy shift in thinking as to just how much attention employers should pay to the finances of their employees. Accordingly, modern companies are for the most part quite knowledgeable on the significance of employee financial wellness, with human resources professionals serving a particularly important function in constructing, promoting, and supporting company-wide wellness efforts that emphasize financial health and security to the benefit of employers and employees alike.
Some of the main areas of concern with regard to employee financial health are personal financial management, retirement savings, and debt/obligations. The proper balance and management of these factors can reduce stress levels, increase well-being, and even improve job satisfaction as employees are able to focus more on making a positive contribution through their work instead of being preoccupied with money shortfalls.
Research shows that worrying about financial issues can have a depressing effect, both in terms of employee psychology and engagement/productivity on the job. By alleviating some of those financial concerns through the provision of education, tools, and support to better manage financial problems, HR departments can help employees re-engage with their work and improve their efficiency and concentration by removing one of the primary distractions and obstacles that is getting in their way.
Further, offering comprehensive benefits packages to encourage and promote employee financial well-being can not only proactively work to help prevent some employees from experiencing financial distress and/or hardship in the first place, but thorough financial wellness benefits offerings can also serve as a point of differentiation from the competition when it comes to attracting and retaining talent. In addition to providing meaningful resources and services that can assist employees with practical concerns, the mere act of offering these kinds of benefits reflects a company that cares about the plight of employees beyond the bare minimum and underscores the supportiveness of the environment.
Including financial wellness offerings within employee benefits packages can also have the added benefit of lowering healthcare expenditures. There is a direct correlation between financial stress and health issues - including the development of chronic conditions, which often result in significant health expenditures borne by both the afflicted employees as well as their employers. Even relatively simple programs that teach employees better budgeting, saving, and debt management practices have been determined to reduce health care spending overall, which provides an opportunity for HR professionals to make another meaningful impact toward the business's bottom line.
Beyond enabling a more focused, healthier workforce that delivers increased earnings through improved efficiency and requires less medical care, employee morale may be the biggest remaining beneficiary of comprehensive financial wellness benefits. Believing that their employer is invested in their well-being in ways outside the paycheck-for-labor exchange can help instill genuine loyalty in employees and improve job satisfaction in ways that can have impacts exceeding recruitment and retention efforts. These kinds of efforts can go a long way toward building cohesive, cooperative teams that are more inclined and better equipped to undertake initiatives that improve the company’s position and provide a significant competitive advantage to the organization as a whole.
Clearly, with so many positive results that can be expected from taking an active position in fostering the financial wellness and security of employees, employers have good reason to have abandoned the more traditional ‘hands-off’ approach and are reaping many benefits - both concrete and more abstract - as a result.
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