Why Financial Wellness?
Could financial wellness be the answer? Companies of all sizes are constantly searching for ways to increase employee engagement, improve productivity, build and/or retain a quality team, and enhance benefit programs. Financial wellness could be a simple solution for reducing employee stress creating a more favorable work environment.
Offering your employees a financial wellness program can have a dramatic impact on your bottom line, both on a short-term and long-term basis. By offering financial wellness programs, you can help employees make positive improvements to their financial behavior. The details of these programs will vary depending on the specific needs of the company’s workforce, but they all share the same goal: to help employees achieve balance and control over their finances, leading to a healthier, more productive workforce with less absenteeism and higher retention rates.
Personal finance issues are a huge distraction for employees and may contribute to “presenteeism”– a state in which employees are physically at work yet mentally adrift in their own troubles. Nearly half (46%) of all employees say they spend three or more hours at work each week thinking about or dealing with their personal finances – that’s 156 hours (19.5 days) over the course of a full year! By offering education and support for employees to help them better manage their finances, you may be able to reduce presenteeism.
It has been said that it is more cost effective to keep an employee that to hire a new one. Employee turnover costs companies time, money, and other resources. Research suggests the average cost of turnover was 21 % of an employee’s annual salary. 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.
Health Care Costs
Whatever health condition you can think of, stress has been proven to exacerbate it. The health risks associated with stress are pushing healthcare costs higher and higher for employers and employees alike. Employers who offered financial wellness programs saw an average reduction in operating costs of $348 per employee per sick day. Many plan on delaying retirement in an effort to combat low account balances. That delay can be costly: for each employee who puts off retirement, employers could be looking at an additional annual cost of over $5,000 in health insurance premiums.
Pay it Forward
Financial wellness is like investing in your employees, offering employees greater retirement security can help employers cultivate a less stressed, healthier and more engaged workforce. Whatever reason makes you decide to establish or enhance your financial wellness program, you’ll be offering a priceless asset to your employees and taking steps toward helping them control their financial futures.
At Investment Solutions Group, we care about helping you prepare your employees for retirement. We work alongside you to offer the most effective employee benefits, from well-designed retirement plans to comprehensive financial wellness programs.
Securities offered through LPL Financial. Member FINRA/SIPC.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. This material was prepared for Jerome Pfeffer’s use.
1. PricewaterhouseCoopers LLP. “Employee Financial Wellness Survey” (2016): Pg. 8. PWC. April 2016.
2. Based on 2016, employer costs for employee compensation (ECEC) $34.15 per hour. Bureau of Labor Statistics. “Employer Costs for Employee Compensation- Sept. 2016.” www.bls.gov. Dec 2016.
3. Boushey, Heather. “There Are Significant Business Costs to Replacing Employees.” Center for American Progress. Nov. 2012
4. Aon Hewitt. “2016 Hot Topics: Retirement and Financial Well-being.” Pg. 6. 2016
5. Financial Wellness Landscape Analysis: An Overview of the Need for Workplace-Based Financial Wellness Programs. ING Employee Benefits, 2013.
6. “Aon Hewitt Analysis Shows Upward Trend in U.S. Health Care Cost Increases.” Aon Hewitt, Nov. 2014.
7. Nyce, Steve. “Which Employees Are Delaying Retirement and Why?” Willis Towers Watson. Sept 2014