#HR Trends and Insights | Money Savings

Everything You Need to Know to Enhance Employee Financial Wellness

March 13, 2024

Economic fluctuations, market instability, and rising inflation rates are currently contributing to financial stress and challenges for workers.

The burden of managing personal finances with limited guidance often leads to heightened stress levels and reduced productivity in the workplace.

As a result, employers are recognizing the urgent need to address employee financial wellness, paving the way for a more prosperous future for all.

Current Affairs Impacting the Financial Health of Employees

The financial well-being of employees can be influenced by several life factors.

These issues hurt employees, leading to increased financial stress, and reduced overall employee physical and mental health, job satisfaction, and productivity.

Financial worries include the following:

  • Economic fluctuations
  • Rising inflation
  • Healthcare costs
  • Student loan debts
  • Retirement planning challenges

The Cost of Living

More employees than ever before say their compensation isn’t keeping up with the rising cost of living expenses.

CNN reported the number of households behind on utility payments at close to 20 millionlast year, with the amount in arrears reaching a staggering $19.5 billion.

A Bankrate credit card debt survey showed a record number of people have turned to credit cards to make ends meet and more cardholders are carrying over their balances from month to month.

In a November 2023 survey, 49% of cardholders fell into this category, up from 39% in 2021.

The Federal Reserve Bank of New York reported total credit card balances hit a high of$1.08 trillion in the third quarter of 2023, while CNBC found, thanks to inflation, almost 60% of Americans are living paycheck to paycheck.

Why Is Financial Wellness Important in the Workplace?

Financial distress has become increasingly prevalent among employees, and this is affecting their ability to focus on work, their overall self-esteem, and their financial well-being.

1. Improve Employee Productivity

When employee financial stress is alleviated, they can focus more on their work, leading to increased levels of productivity.

2. Enhance Employee Retention

Initiating a financial wellness program demonstrates an employer’s commitment to employee financial well-being, contributing to higher employee loyalty and retention rates.

3. Decrease Healthcare Costs

Financial stress has been linked to various health issues.

By addressing financial wellness, employers can promote physical health and mental health and potentially reduce healthcare costs.

4. Reduce Absenteeism

Those with money worries can pause work for reasons other than being overwhelmed or stressed by their financial situation.

An effective financial wellness program helps employees minimize absenteeism, as this reduces an employee’s productivity and affects the rest of the team.

5. Form a Stronger Personal Bond with Staff

Employee financial wellness programs can be customized for individual employee needs. Create an anonymous employee questionnaire about your employees’ financial health and security.

If you get feedback regarding specific issues, offer financial wellness programs that cover this topic.

For instance, if employees report they need money to be put aside for an emergency fund, then running such a program can help your team create budgets that assist in building their own financial savings account for this type of situation.

What Are the Best Financial Wellness Practices?

Studies show workers welcome their employer’s involvement in improving the state of their finances.

Here are a few crucial items that can have a positive impact if they can learn to tackle them successfully:

1. Household Budgeting

Successfully managing the month-to-month cash flow and debt at home is part of the foundation for any financial wellness practice.

Always know where the money is going!

2. Stay on Top of Taxes and Tax Education

Knowing how taxes work, what credits and deductions are available, the tax-saving benefits of 401(k), and more can help reduce stress for employees during tax season and beyond.

3. Create an Emergency Fund

Setting aside cash for a rainy day is imperative to being financially stable.

This way, when the roof leaks, the car breaks down, or you fall ill and incur medical costs, this safety net is there.

Having an emergency fund in place alleviates a lot of stress.

4. Gain Financial Literacy

Knowing what needs to be done to achieve any financial goals affords an individual with guidance and confidence.

5. Check Credit Scores and Credit History

Checking on credit scores and credit history can uncover financial weaknesses and unpaid bills that are messing with current credit scores.

Regularly checking credit reports makes you aware of what lenders see and helps an employee detect incomplete or inaccurate information.

What Is an Employee Financial Wellness Program?

To combat the detrimental effects of financial stress on their workforce, employers are implementing effective financial wellness programs.

These programs are designed to empower employees with the necessary tools and resources to manage their finances effectively.

By offering guidance services and assistance, employers can alleviate financial stress and nurture an environment conducive to financial well-being across the board.

Elements of a Successful Financial Wellness Program

1. Education and Awareness

Employers should provide educational financial wellness services, resources, and workshops to help employees understand and improve their financial literacy.

  • Workshops on budgeting, saving, and investing.
  • Information about employee benefits and retirement plans, 401(k) and HSAs.

2. Personalized Financial Guidance

Offering one-on-one financial knowledge and counseling sessions with experts can provide employees with tailored advice for their financial issues.

  • Educating employees about debt management and credit counseling.
  • Guidance on retirement planning and investment strategies.

3. Access to Tools and Resources

Businesses should provide employees with user-friendly financial wellness tools and resources to manage, track, and improve their financial situation.

  • Mobile apps for budgeting and expense tracking.
  • Online resources for managing personal finances.

4. Incentives and Rewards

A company can motivate employees to engage in financial wellness solutions by offering incentives and rewards that further support their financial well-being and goals.

  • Matching contributions to retirement plans.
  • Financial incentives or bonuses for meeting specific financial milestones.

Ensure Financial Success with Edenred

Find the resources, tools, options, and assistance needed to ensure financial wellness with Edenred.

1. Flexible Benefits Solutions

Edenred offers versatile savings options, such as Commuter Benefits, which enable employees to set aside pre-tax dollars to cover the cost of commuting to and from work.

2. Simplified Expense Management

With Edenred’s digital platforms and tools, like Claims Reimbursement, AnytimePay, or Commuter Benefits, employees can easily track and manage their expenses, promoting responsible spending habits and enabling financial control.

3. Increased Productivity

By alleviating financial stress, Edenred’s programs empower employees to focus on their work performance, resulting in heightened productivity and job satisfaction.

4. Improved Employee Engagement

Through personalized financial guidance, employees feel supported and engaged with their finances, leading to overall well-being and commitment to the organization.

How Can Edenred Help

The financial wellness of employees is crucial for their overall health and productivity.

By implementing robust financial wellness programs, businesses can support their team and create a positive work environment.

Edenred’s employee benefits provide companies with the resources and tools necessary to ensure the financial success and well-being of their employees.

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