Nurturing Financial Wellness at Your Firm

Financial wellness is one of the top trends in employee benefits right now because it has a good return on investment. When done right, it benefits both the employees of small businesses and their employers.

It may seem like it’s outside the interest of employers to help employees deal with their individual financial issues. In fact, it helps improve work quality by allowing employees to focus on their jobs with a higher level of satisfaction with work. Getting finances under control decreases “presenteeism,” when employees come to work but aren’t physically or emotionally able to do their jobs because they’re dealing with personal issues.

Much like a health wellness plan, financial wellness can create financial peace for your employees. “Money is the number one stressor in America and the number one cause of divorce,” says Carol Craigie, managing partner and coach at Fiscal Fitness Clubs of America. “When you feel like your finances are under control and you have a plan, stress levels drop.” In addition, with lower stress levels come lower medical bills, according to research.

Craigie stated that financial fitness programs can be divided into three areas: education, coaching, and peer support. What a small business provides depends on the employer’s budget and goals. Here’s how each area can impact employees:

Education

Education takes many forms in financial fitness. It can be an in-person class offered during work hours, a live or recorded webinar which employees attend during or after work, or guided access to paper or online educational tools.

Not everyone who needs financial help works traditional 9-5 hours or can take a lunch hour for a webinar or a live presentation. “If it’s recorded, that helps people,” Craigie says and cautions against using education-only programs, where the presenter is selling financial products.

There are useful online tools as well, but employees aren’t always familiar with them. Websites like mint.com, for example, is an excellent cash flow tracking tool – and it’s free. With a 15-minute orientation, employees can understand how to use it. There are also online retirement projection sites, such as Equitable’s retirement planning calculator, or debt reduction sites; however, employees may need help understanding how to set them up and consider different scenarios.

Coaching

“Knowing is not the same as doing,” Craigie said. Once employees have information, they may also have questions about how to act on what they have learned. For example, knowing that they should evaluate their homeowners insurance doesn’t mean they know how to do it. Therefore, a coaching component, while it may increase a program’s cost, can also increase its effectiveness and can be offered via email, phone or in person. “The goal should be to empower employees to take power over their finances,” said Craigie.

Peer support

While not everyone wants peer support, it can make a difference to those who participate. In Craigie’s experience, more women join financial peer support groups than men and find value in sharing goals and strategies. They can also serve as accountability partners. “They share their goals, not their financial situations which empowers them to own it and stay with it,” according to Craigie.

How to pay for financial wellness programs

There are a number of ways employers can offer financial fitness programs, depending on their budgets. Some employers pay for the entire program, including various elements. Some firms use a shared cost model, subsidizing the program and asking employees to pay a nominal amount to participate.

Another model is to organize the program for employees but require them to pay their own cost. A financial wellness company may offer a discount to employees when the employer distributes marketing information about it and hosts some webinars. In these instances, while the employees pay the cost, the employer is still offering them a benefit.