Companies of all sizes are always on the prowl for ways to improve productivity, attract and retain top talent, and increase employee engagement. Maybe the answer is simple: reduce stress with Financial Wellness.
What is financial wellness? As an employer, it is a program or set of programs that aim to improve the financial behavior of your employees. The program itself will vary based on the needs for your workforce but the goal is the same: to help employees find balance and control over their finances. Improving employees’ financial wellness may lead to a more productive workforce with less absenteeism and higher retention rates. It may also help create a healthier workforce which has short and long term eﬀects on your company’s bottom line.
Personal finances prove to be a huge distraction for employees. It may come as a surprise to learn that nearly half (46%) of all employees say that at work each week they spend three hours or more thinking about, or dealing with, issues related to their personal finances.1 Over the course of a year, that’s 156 hours or 19.5 days! By offering education and support for employees on how to better manage their finances you may be able to reduce “presenteeism” or time spent at work focused on financial stress.
Employee turnover costs a company time, money, and other resources. Research suggests that direct replacement costs can reach as high as 50%-60% of an employee’s annual salary, with total costs associated with turnover ranging from 90% to 200% of annual salary.2
It has been said that employees will leave their employer for as little as another $1 per hour. By offering a wellness program, you can help your employees control their finances through budgeting, debt reduction, and savings. Thus, it reduces the likelihood that happy, financially healthy employees would leave for another employer.
For example, if you have an employee that makes $50,000 per year and they leave for a competitor, if your replacement costs are 50%, that means it will cost your company $25,000 to find a suitable replacement employee. However, corporate culture that promotes financial wellness may help you reduce turnover and could save your company money.
Employees are more likely to stay with an employer that they feel cares about their well-being, and 85% of employers agree that offering a financial wellness program is the right thing to do.3
Stress has been known to exacerbate just about any health condition you can think of. The health risks associated with stress are pushing healthcare costs higher and higher for employers and employees. Employers who offered financial wellness programs saw an average $348 reduction in operating costs per sick day, per employee.4
80% of Americans are unprepared for retirement and the amount they have saved is even more bleak. 1 out of 4 have less than $1000 in savings! Many plan on delaying retirement as a way to combat low account balances, however that could spell trouble as an employer. For each employee who puts off retirement, employers could be looking at an additional annual cost of over $5,000 in health insurance premiums.5
Help your employees live more financially secure lives.
This will not only enrich company culture and the health of your workforce but research has shown 3:1 return on investment.6 No matter the reason you decide to start or enhance a financial wellness program, the bottom line is that you are offering an invaluable benefit and taking steps toward helping your employees take control of their financial futures.
At Atlanta Retirement Partners, we genuinely care about the well-being of your participants. We work hand-in-hand with you to seek the most effective employees benefits, from a well- designed retirement plan to a comprehensive financial wellness program.
1 PricewaterhouseCoopers LLP. “Employee Financial Wellness Survey”(2016): Pg. 8. PWC. April 2016.
2 Cascio, W.F. 2006. Managing Human Resources: Productivity, Quality of Work Life, Profits (7th ed.). Burr Ridge, IL: Irwin/McGraw-Hill. Mitchell, T.R., Holtom, B.C., & Lee, T.W. 2001. How to keep your best employees: Developing an effective retention policy. Academy of Management Executive, 15, 96-108
3 Aon Hewitt. “2016 Hot Topics: Retirement and Financial Well-being.” Pg. 6. 2016.
4 Financial Wellness Landscape Analysis: An Overview of the Need for Workplace-Based Financial Wellness Programs. ING Employee Benefits, 2013.
5 “Aon Hewitt Analysis Shows Upward Trend in U.S. Health Care Cost Increases.” Aon Hewitt, Nov. 2014.
6 Dr. E Thomas Garman.“Increase the Bottom Line by Helping Distressed Employees During Challenging Financial Times” SHRM Webcast. Aug 2008.