Get this: Nearly 80% of employees say a financial wellness benefit is an important part of a comprehensive benefits package. But even with those numbers, only about 1 in 4 employees actually have access to a financial wellness benefit. Crazy, right?
Those numbers come from Ramsey Solutions’ 2022 SmartDollar Employee Benefits Study, where a third-party research panel polled more than 3,000 full-time American employees about their company benefits. Not only did it reveal that there’s a financial wellness benefit supply and demand problem, but it also revealed that 55% of employees worry about their personal finances daily. That’s a whole lot of stressed-out employees—which creates a huge opportunity for employers to provide some relief.
Of course, adding a financial wellness benefit isn’t as simple as adding a new coffee flavor to the break room rotation. It has to benefit your business and make a positive impact on your employees’ lives. That’s why we’re digging into the facts—so you can see just how much a financial wellness benefit can help your company.
What Is a Financial Wellness Benefit?
Financial wellness benefits are still a pretty new addition to the workplace benefits world. With increased financial stress weighing on both businesses and employees from worker shortages and inflation in recent years, financial wellness benefits have gained more traction as not just a nice-to-have but as a must-have. But what exactly is a financial wellness benefit?
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In a nutshell, financial wellness benefits are tools—like SmartDollar—that helps employees make and stick to a budget, get out of debt, save for the future, and retire with confidence. Plus, it’s a resource that can help your business achieve better employee retention, improved productivity, healthier employee stress levels, and increased participation in your company’s retirement plan.
How Financial Wellness Builds Your Company’s Bottom Line
Decision-makers have a lot on their to-do lists already, so it’s no surprise that onboarding a new benefit would be last on that list. But the truth is, every day your employees struggle with their personal finances is another day your company’s financial and cultural well-being gets zapped. But companies that offer a financial wellness benefit can draw a straight line from the financial health of their employees to the health of their bottom line. Let’s take a look.
10 Positive Financial Impacts That Come From a Financial Wellness Benefit
Nearly 80% of benefits decision-makers report that their employees’ personal financial problems have a negative impact on their work, according to our 2021 SmartDollar Financial Wellness Benefits Study. But here’s how a financial wellness benefit can cut back the hits to your bottom line and bump up the positives:
- Higher participation in employee-sponsored retirement savings plans. Delayed retirement is a bottom line killer, but a financial wellness benefit is a retirement plan booster.
- Higher productivity levels. Low productivity and distracted employees can burn up budget dollars and hurt employee morale.
- Higher employee retention rate/lower turnover. Employees who have financial stability are less likely to jump ship in search of a raise.
- More employees creating or adding to their emergency savings. When employees have more financial security and a solid safety net, your business doesn’t have to compete for their attention during the day.
- More debt-free employees. Debt-free folks don’t carry the time- and mind-consuming burden of stressing over how to make a payment day in and day out.
- Less employee absenteeism. Financial stress takes a mental and physical toll on employees. This can lead to more employees taking sick days, calling in or just not showing up at all.
- Reduction in 401(k) loans. With budgets and savings in place, employees don’t need to rob their 401(k) plans to cover the cost of unexpected emergencies.
- Lower health care costs. Employees with less financial stress may see a drop in stress-related illnesses and symptoms—and that can drive everyone’s health care costs down.
- Fewer workers’ comp claims. Less financial stress means more focused employees, which can reduce workplace accidents and overall claims.
- Less reported employee stress. Less stress means healthier employees, less absenteeism, increased productivity, and improved company morale.
Your Employees Want (and Need) a Financial Wellness Benefit
Offering a financial wellness benefit helps your company reduce costs associated with employee financial stress. It’s also a really good way to improve your employees’ quality of life, which can only positively impact your business. Employees want to feel less stressed about money and more in control of their present and future finances. The findings from our 2022 SmartDollar Employee Benefits Study have some surprising things to say about your employees’ money problems, such as:
Money stress follows employees to work.
Do you know how many of your employees are struggling financially? The number may be higher than you think. Our study shows that 55% of employees worry about their finances every single day. Personal finance problems don’t stay personal—they follow your employees to work too.
More than one-third of employees report that they’ve missed work due to a financial problem. And 45% say that in the last year, they’ve been distracted at work due to financial problems.
What if you gave your employees access to resources that reduce their financial stress? That’s a lot of freed-up mental energy your employees now get to pour back into your business and into their own lives.
Employees want help managing their finances.
With so many employees struggling to get a handle on their money, it’s no wonder many wish they could look to their employers for help. A whopping 73% polled in our study say they wish their employer offered more financial wellness resources. But only 23% of employees actually have access to a financial wellness benefit from their employer. You know what that means, right? Giving employees access to a financial wellness benefit is low-hanging fruit and an easy route to happier, healthier employees and a happier, healthier business.
Employees benefit from a financial wellness benefit.
Financial wellness education and resources don’t just contribute to increased employee satisfaction, better mental and physical health, and greater productivity. Surprise, surprise—they also help employees improve their finances!
Employees who have access to a financial wellness benefit are twice as likely to describe their personal finances as “better off than this time last year” compared to those who don’t. And nearly 40% of employees with a financial wellness benefit say that it’s made a significant impact on their personal finances, with another 44% saying it’s made a moderate impact.
Offer a Financial Wellness Benefit So Your Company Isn’t Left Behind
The bottom line is this: Financial wellness isn’t a fad, and the numbers don’t lie. The longer companies wait to add financial wellness to their employee benefits packages, the longer their employees suffer. Not to mention, the more money gets drained from their bottom line.
But when a company adds the right financial wellness benefit to their offerings, they see real improvements in their employees’ money situations and morale. And as a result, that leads to improvements in company recruitment and retention.
Want to explore what a financial wellness benefit can do for your company? Learn more here.
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Ramsey Solutions
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