Financial literacy isn't a strong suit for many, and this results in widespread financial pressure. A Harris survey found that 41% of U.S. adults, or around 92 million Americans, aren’t financially savvy, giving themselves a grade of C, D, or even F when it comes to personal financial knowledge. In addition, 80% believe that they’ll benefit from a professional answering their everyday questions related to finance. Tellingly, a mere 4% cited the workplace as a source of financial knowledge.
So, there’s a good chance many of your employees are in need of help in terms of financial literacy. Rather than let your staff look for financial advice elsewhere, why not take the initiative to give it to them? Your employees are likely to view this initiative as management lending a much-needed helping hand, which in turn will boost morale.
Before you start, here's a list of things you need to know about employee financial wellness programs:
There Is A Demand For These Programs
While it's true that many Americans don't view the workplace as a source of financial wisdom, recent research suggests that a financial wellness program is a company benefit employees actually want. In fact, 60% of employees polled admit that they are more likely to commit to a company and be more productive if an employer demonstrates a commitment to their financial situation.
Financial Wellness Programs Don't Guarantee Good Financial Health
A financial wellness program is a means to an end — the end being improved financial health. That means it won't add to your employees' financial standing per se; instead, it will simply help them gain a deeper understanding of money and a greater appreciation for it. The result is a healthier relationship with money, which can then lead to your staff improving their personal financial situations. This in turn will have a positive effect on their productivity and mental health at work.
A Good Financial Wellness Program Has Four Pillars
The four pillars of good financial wellness programs are Learn, Plan, Invest, and Manage. These programs will impart financial knowledge, aid with financial goal-setting and wealth-building, and teach employees how to better manage their finances.
Financial management can be best accomplished through sessions where experts talk about the different options employees have for long-term savings. Topics that are the top priority for employees are the availability of financial solutions and services to help with their entire financial lives. Many are looking for advice on how to save for their future through their 401(k) or high yield savings accounts.
A guide to high yield savings accounts highlights how these have higher interest rates, and more importantly, provisions for greater annual percentage yield, or the amount of interest you could earn over a year. As they are also very low risk this is something that a company can recommend without putting financial pressure on their employees.
Other savings options that are likely to be discussed are cash management accounts and certificates of deposit, as they also offer high interest rates, but with vastly different terms and levels of accessibility. Apart from savings options, any good financial wellness program must also discuss investment options, like investing in the stock market, trading forex, and investing in gold. In this way, employees will know not only how to save money, but also grow it.
Internal Communication Will Be Key To The Program's Success
It was previously discussed how internal communication is indispensable to the success of employee wellness programs looking to improve their staff's overall health. The same could be said for programs aimed at improving employees' financial health. Fortunately, you can ensure good internal communication through meetings or video content (ideal given the restrictions on face-to-face interactions), regular and interactive check-ins with staff, and institutionalizing feedback mechanisms.
Lastly, instituting a financial wellness program will be good for business, as it can be a solution to declining productivity. With debt-anxiety distractions (not to mention sick leaves due to failing health caused by financial distress) minimized, your company is looking at a $3 return for every $1 you invest in the program, or around $50 per employee annually. Needless to say, it's time to make that investment.