How is your bottom line linked to your workers’ finances?

By

EY Global

Multidisciplinary professional services organization

4 minute read 16 May 2018
Related topics Growth Workforce Purpose

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By helping employees manage money-related stress, financial wellness programs can improve productivity and reduce turnover.

Employee stress about money, particularly among Millennials, is on the rise. This strains companies too because it often leads to distraction, lost productivity and staff turnover. According to a Society for Human Resource Management survey, 83% of HR professionals say financial stress in employees negatively impacts work performance.

Effectively addressing these stresses through financial wellness programs can help reverse the trend. A 2014 report by the US Consumer Financial Protection Bureau found that every dollar spent on employee financial wellness brings a return on investment of three dollars.

But to be successful, these programs require going beyond introducing new or improved benefits, such as matching pension contributions, profit sharing, and maternity and paternity leave. Crucially, any wellness program must identify, understand and address employees’ particular financial challenges.

Employers must recognize that one size does not fit all, and different generations have very different concerns. Perhaps the most specific worries about financial security are carried by Millennials.

The Millennial challenge

Higher education tuition and fees in the US have surged over the past three decades, especially since 2000, according to 2015 data from the College Board.

According to The Institute for College Access & Success, nearly seven in 10 seniors from public or nonprofit US universities graduated with student debt — totaling a staggering $28,950 per student on average. The cost of attending university is also on the rise in other countries, such as the UK, where fees have gone from zero in 2010 to £9,000 a year currently.

Millenial_wage_worries

How employee wellness programs help both them and your business

With these issues facing the fastest-growing workplace demographic, managing financial stress becomes a business imperative.

Employers and employees both have a lot to gain through programs that support workers as they confront various financial stresses at each stage of their lives. With relatively minimal investment, companies can take measures to understand their workforces, what they need and how best to address those needs and bring peace of mind.

A well-planned and executed financial wellness program, including webinars, short videos to promote financial education, a planning website and one-on-one financial counseling, can significantly reduce stress and employee turnover.

By easing financial concern, companies can reduce employee absenteeism, improve productivity and ultimately support the bottom line.

Four key steps to improving employees’ financial wellness

  1. Analyze your current workforce to understand generational differences.
  2. Analyze HR outcomes to determine the level of current financial stress. For instance, you can examine turnover rates, health care costs, absenteeism and job performance ratings.
  3. Reconsider your communication strategy to help employees better appreciate, value and utilize benefit plans, thereby improving retention.
  4. Consider the value of building a financial wellness program around these new findings.

Summary

Because worker stress about money strains companies too, financial wellness programs benefit both employees and employers.

About this article

By

EY Global

Multidisciplinary professional services organization

Related topics Growth Workforce Purpose