Employee Finance Wellness Program- All You Need To Know

The heightened uncertainty over the economy and employment prospects going forward due to the coronavirus outbreak has adversely affected the physical and mental well-being of people.  Yet, we are finding new ways every day to persevere through “the new normal”. 

Most companies are struggling to stay afloat while trying to reclaim their positioning in the market. This has led to industry-wide operational cost-cutting and downsizing which has left many workers overwhelmed and doubtful about their future. So, apart from keeping safe in these unprecedented times, people are also worried about maintaining financial stability. 

Financial stress has a direct impact on both your personal and professional life. A recent report suggests that employees with financial worries have 51% lower engagement. Not just that, they are 32% less productive as compared to employees without financial stress. 

As an employer, there are certain ways in which you can help your financially stressed employees, and establishing a well-rounded,  Financial Wellness Program is a popular option. 

What is a Financial Wellness Program and Why is it Important?

Employees commonly face financial challenges related to clearing loan-related debts, retirement planning, children’s education, and health care expenses, amongst others, that cannot be overcome easily. Ensuring a financially secure future for themselves (and their loved ones!) while juggling work responsibilities can cause unnecessary stress, anxiety, and even physical ailments. Not to mention, employees’ financial stress can cost an employer $2000 per employee every year simply. Employees who are struggling with their finances find it difficult to show up every day, stay productive, turn in high-quality work, and engage with co-workers.

A financial wellness program (FWP) is a part of the employee benefits offered by employers. It helps people manage their money better and reduce their financial worries. 

An ideal FWP ensures that employees enjoy their personal lives, perform better at work, and actively participate in work tasks or activities. 

Almost 42% of employers are already offering FWPs to their employees. Today, employers consider financial wellness programs as a long term benefit. It is an investment in the wellbeing of the employees.

When your employees are better equipped to manage their expenses, they tend to be more focussed on the company’s vision and business goals. According to a recent study, an FWP can have a return on investment of 300%. Not to mention, FWPs are a testament to how much you care about your employees, which in turn, helps you attract top talent to your company.

Now that we know why financial wellness programs are important, let’s find out what all must be included in your Financial Wellness Program.

What does an FWP entail?

Here we are some popular ideas to help you design your own financial wellness program. Also included are some real-life examples of some companies offering these financial benefits.

Financial Counselling

According to an Eckler survey, more than 80% of employees want financial education at work. However, only 58% of companies actually offer help in this regard. Employees today want financial stability and are always on the lookout for resources that can help them out.

By offering financial counseling, you’re providing advice and support to employees who are facing financial difficulties. The sessions are usually conducted by financial experts/advisors who, ultimately, help them make good financial decisions in the long-term.

For example, Staples, a popular retail company for office supplies, offers a financial counseling program to educate its employees on the basics of managing finances, paying off debt, and saving for retirement. Similarly, Schlumberger also offers a financial counseling program to their employees to help them set and achieve personal financial goals. 

Provident Funds (PF)

A recent study suggests that 44% of employees worry about their retirement. Putting your money in the right places is important. A lot of employees can benefit greatly from understanding their investment options. 

For example, it’s very common for companies to offer a Provident Fund (PF) or a 401(k). In it, a fraction of the employees’ salary is deducted every month and goes towards their “pension fund”. Later, at the time of leaving, the employee can withdraw this lump-sum amount.

Citibank provides a PF plan for its workforce that allows employees to save 10% of their salary and an equivalent of 10% is contributed by the company. Ernst & Young (EY) also matches employee pension contributions up to 6 percent to the amount employees save from their salaries.

Medical Insurance

According to 88% of employees, health insurance is one of the most important benefits to consider while accepting a job offer. This is mainly because the skyrocketing health care costs have always been a cause of concern for everyone. . Especially during medical emergencies, having your treatment expenses taken care of can be very reassuring for the employees. 

Employer-sponsored health insurance covers all the health care expenses of the employees. This ensures that employees can seek appropriate treatment when they are sick.

For example, Hewlett Packard offers health insurance, life insurance, and personal accident insurance to their employees. Similarly, GoDaddy pays 100% of employee health insurance premiums and 50% for spouses, domestic partners, and dependents. 

Considering the present times, many employers today are offering COVID insurance covers as well. So, you might want to look into that while creating an ideal FWP for your employees.  to their employees. So, you might want to consider including a COVID cover in your financial wellness program.

Infrastructural Incentive

Employer-sponsored office related equipment, stationary, desk, devices, etc is called infrastructural incentive.  

Amid the coronavirus pandemic, most of the employees are working from home—something that’s not likely to change in the foreseeable future. As a result, people are setting up ergonomic workplaces in their homes to ensure higher productivity. To help employees create a healthy work environment, companies are reimbursing employees for the supplies they need to set up a proper work station. 

For example, Shopify is giving its new remote employees $1,000 to set up their new home office. Twitter has also joined the bandwagon and is offering $1,000 to their teleworkers. On the other hand, Indeed will be reimbursing their remote employees up to $500 for standing desks, chairs, or lighting needed for setting up a home office. 

Education Loans

Almost 86% of people said they would commit to a company for five years if their employer offered education loans. This is because education is expensive. Perhaps no other financial issue weighs more on the employees than their own student loan debt. Or the loan is taken for their children’s/spouse’s education.

In simple terms, an education loan is the amount of money borrowed to finance education-related expenses including tuition,  school supplies, and living costs.  

Aetna, a healthcare company, provides student loan payments up to $2,000 a year with a total cover of $10,000 to their full-time employees. Even part-time employees receive $1,000 a year with a total cover of $5,000. Whirlpool is another company that offers education benefits to their employees by providing  $10,000 for tuition assistance.

Employee Stock Purchase Plan (ESPP)

The employer expectation of offering an It’s not uncommon for small to medium-sized businesses or startups to offer an employee stock purchase plan to promote employee retention and to encourage a more entrepreneurial mindset.

In an employee stock purchase plan (ESPP), participating employees get to purchase company stock at a discounted price.

Today, more than 75% of employees actively participate in ESPP that their companies provide.

ESPP gives employees an opportunity to take accountability for their overall contribution and establish some semblance of ownership within the company. When the employee’s interests align with the employers’ long-term objectives, targets, and goals for the company, you can expect a more dedicated workforce and a reduced turnover.

Employees participating in ESPP

For example, Starbucks offers an ESPP to its employees called “Bean Stock”. Every Starbucks employee can buy stocks and become shareholders in the company. Cadence, a U.S. based electronic design automation company, offers a 15% discount to its employees for buying stocks in the company. 

Over to you

As we discussed above, financial stress can act  as a giant roadblock for success—not just for the employees but for employers, too. By offering financial wellness programs, you can easily eliminate the financial stress existing in your employees’ lives. 

With the provision of financial wellness programs, employees gain more confidence in their future. Availing employer-assisted benefits like PF, medical insurance, and ESPP are great places to start with. Employees can also learn more about managing their money and the various investment options they have.  All the resources offered under the FWP help employees navigate their fiscal concerns in the right way to ensure make their personal and professional lives better. 

We hope this article emphasized the importance of financial wellness programs and what they could mean for your employees.