What Is Financial Wellness?

It refers to the state of one's personal finances

Someone who is financially well:

  • Has sufficient financial resources for emergencies

  • Lives a lifestyle within one's financial capacity

  • Has a manageable amount of debt

  • Has access to information and tools to make better financial decisions

  • Has a vital risk management plan

  • Has a roadmap to achieve long-term financial goals

  • Has an ongoing and giving estate plan

Why does financial wellness matter?

A person's financial state has far-reaching implications on one's personal life, family life, and work performance. To understand the importance of financial wellness, one should first take a look at the effects of the absence of it.

 

Increased absenteeism​

  • Financially stressed employees had close to double the absenteeism rate (3.5 days per year) than their counterparts. (Willis Towers Watson)

Decreased productivity

  • American companies lose on average 500 billion a year due to employee's personal financial stresses (Salary Finance)

  • Financially stressed employees who were distracted at work could lose an average of 12 days a year 

  • 43% of workers spend time on their personal finances at work while 57% worry about it at least once a week during work hours. (John Hancock)

Benefits of Financial Wellness

Companies that participate in employee financial wellness attract and retain top talent.

Talent Retention

Workers who are financially well are not only significantly more productive, engaged, and focussed, but are also more loyal.

Talent Recruitment

  • 36% of Gen Y and 35% of Gen Z employees rated company wellness programs "extremely important" while making a job decision. (Randstad)

 

How can I improve my employee's financial wellness?

Setting up an employee financial wellness program can be quick and completely free for a start. Follow our quick setup guide to a simple financial wellness program.

1. Set a measurable goal

  • Goals are important for both organizers and participants. Organizers need them to measure the impact of their programs. Participants should understand the benefits of participating and be mentally prepared to apply their takeaways.

 

Examples:

  • All employees are to have a personal monthly budget

  • All employees are to be familiar with all our company's employee benefits

  • 20% increase in uptake of our company's savings plan

2. Identify volunteers within the organization

  • They can be employers or more senior employees who have a good grasp of basic financial skills. These people will form the backbone of the program. They can give monthly lectures about good money habits and share about their own practices with the workforce. Eventually, they can become internal financial coaches, helping their employees create budgets or practice good money habits

3. Set a date

  • Now that you know what you want to achieve and who is going to help you achieve it, it is time to execute the plan. Simple goals like educating employees on benefits can be completed in one sitting over a casual presentation with some refreshments. More complicated goals like budget tutorials may take slightly longer and may involve one session every alternate week.

4. Measure your progress.

  • Take a quick survey, preferably an anonymous one, to measure the impact of your initiative. This is a good time to evaluate the efficacy of your program and make suggestions for the next run. Organizations that are actively involved in their employees' financial wellness will reap the benefits of a more productive, content, and motivated workforce.

Considerations:

1. Internal Financial Literacy

  • While setting up a financial wellness program can be simple, it may not yield the desired results, or worse, impart the wrong habits in your workforce. For example, budgeting is a highly delicate process that involves factoring in a person's existing lifestyle, beliefs, and commitment levels to ensure sustainability. It is best to trust a professional who is equipped with the skills to customize a budget that is effective and reasonable.

2. Time considerations

  • Programs that are too structured like scheduled lectures will have low participation rates given that employees have other commitments after work hours. Even if lectures are conducted during work hours, employees may not apply the lessons which would waste precious time and still not achieve any measurable goals. Effective financial wellness programs cater to an individual's timetable and allow them to ask for high-quality advice whenever they need it.

Alternatively, you could leave everything to us. 

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