Financial Wellness Plans: Everything Employers Need to Know

Facing rising inflation, global instability and still reeling from the COVID-19 pandemic, many employees are feeling financial pressure right now. In fact, a recent study from PwC found that rising costs are a top concern for one in five (20%) professionals.

What’s more, a worrying 58% said their wages and employee benefits aren’t keeping up with the rising cost of living. This has led to over half (56%) feeling stressed about their finances.

While employers may have been focusing their attention on employee health and wellbeing since the pandemic, it’s clear that financial wellness is now a real concern.

Organizations recognize the need to care for employee wellbeing, both physically and mentally, but how can they go about improving their health and looking out for their financial wellness?

What is financial wellness?

 Financial wellness is generally understood to be when an individual is in a comfortable financial situation. This doesn’t have to mean they earn huge salaries or have loads of money, but it means they feel content, comfortable and secure in their current position.

For employers, financial wellness is about supporting staff in many financial matters to ensure their mental and physical wellbeing doesn’t deteriorate as a result of a stressful financial situation. For example, offering fair salaries, travel cards, staff discounts and more.

Why is it important to have a financial wellness plan in place?

Financial wellness plans are important as they help to champion better working and personal lives for their employees. This has a positive impact on both the individuals and the company as a whole.

Financial wellness initiatives are also part of a holistic wellbeing strategy; they’re needed to create an engaged, flourishing workforce that helps the company to grow and encourages employees to be happy.

More than this, financial wellbeing is important for organizations as financially stable professionals are more likely to be engaged in their work, leading to higher levels of creativity and productivity. It’s also important for staff retention, as PwC found that financially stressed employees are twice as likely to look for a new job than those who aren’t.

10 examples of financial wellness plans

To give you a better idea of what we mean by financial wellness plans and initiatives, we’ve pulled together some of the most popular strategies that organizations currently use. These include:

1. Creating an employee retirement plan
2. Offering free food or lunches in the office
3. Financial education workshops
4. Student loan repayment contributions
5. Life insurance
6. Health insurance
7. Homeowners insurance
8. Commuting and travel assistance, such as company car or travel cards
9. Paycheck advances or early-wage access
10. Short-term employee loans

And these are just a few examples; there are so many financial plans, initiatives and incentives you can offer your workforce based on their individual needs.

6 steps to building a tailored and sustainable employee financial wellness plan

In order to get a strong financial wellness strategy in place, you need to make sure that it’s tailored to the unique needs of your workforce. You also need to make sure this is sustainable and achieves the results you expect. To do this, you should:

1. Focus on your HR strategy

Since financial stress and anxiety can impact employee performance and wellbeing, addressing this needs to be built into your HR strategy. Start by putting together an HR plan that includes a holistic financial wellness program. Your HR team are also the ideal people to gather feedback from the rest of the workforce. This will be important for the next stage.

2. Ask for feedback

Through regular meetings, reviews and, most importantly, employee surveys, you can begin to ask your workforce what they would like to be included in your financial wellness initiatives. Gather as much feedback as you can, and from there, you can begin to identify internal challenges and narrow down your strategy.

3. Select an approach

Now it's time to think about what you can offer and which initiatives you can put in place to support as many people as possible within the workforce. You might start to recognize the resources, tools and programs that you need to do this. At this stage, you should be able to start getting a real plan and budget in place.

4. Choose the right tools and programs

If you're hoping to offer a holistic financial wellness program, you need to make sure that it supports employees at every stage of their careers and life. You also need to make sure you choose the best tools, initiatives and programs.

In order to do this, you must do your research and look around for the top providers. Any tools or resources that you choose must have a positive impact on the workforce, be easy to use and offer the right level of guidance.

Don't rush this decision. If you're going to be investing in financial initiatives for your workforce, these need to be the right ones. Always compare and contrast and make sure you find the most cost-effective solution.

5. Communicate with your employees

Once the wheels are turning on your financial wellness initiatives, you need to communicate what is going on with your employees. HR should begin to put together some content that explains any new plans, tools or resources that are going to become available to employees. This can then be circulated among the workforce.

This also affords you another opportunity to get feedback based on your plans and make sure employees are happy with the finalized ideas before you move forward and invest more time and money into your strategy.

6. Measure the results

Finally, you need to determine which metrics you’re going to use to measure the results of your new plans. For example, you might wish to measure:

• Number of participants signing up to these programs
• Increases/decreases in employee satisfaction
• Increases/decreases in employee turnover
• Number of new hires

By regularly reviewing your financial wellness initiatives and gathering actionable insights, you can create a plan that is sustainable, and you can also update this if it’s not achieving the desired results.

COVID-19, recession, and the future of financial wellness

Based on the current economic climate and the ongoing effects of the pandemic, rising inflation looks set to continue over the coming years.

As a result, a study of Gen Z and Millennials in the workplace showed that 57% expect their anxiety levels to continue rising as well. Sadly, over a third of Millennials and Gen Zers also don’t believe they’ll ever be able to retire with financial comfort.

In the future, it’s going to be critical that we remove taboos around discussing financial issues and that financial wellness becomes an integral part of any workplace wellbeing strategy. This means that there will be new expectations placed on employers moving forward.

Final thoughts

Keeping all this in mind, it’s important to get financial wellness initiatives in place in your organization. Of course, you can only do what’s reasonable for the financial future of your company, but it’s always best to ask for feedback from employees about the types of programs they’d like to see.

Once again, the workforce is seeing a huge shift, and organizations need to keep up with employee expectations if they hope to grow, innovate and continue to attract top talent.