Benefits aimed at improving p ersonal finances – "financial wellness" is the related buzzword – have become increasingly important in today's working world. The reasons are many: debt, rising health care costs, higher rents and property prices, and more. In this blog entry, we will show you why this topic is so important, what benefits are available and how you can offer them to your employees to improve their financial security .
Want to learn more about financial wellness for employees? Download the free Benify e-book: Financial Wellness – a topic you can't ignore .
What does financial wellness mean for employees??
Financial wellness is much more than just a good salary or a lavish bonus. This is more about anything that affects a person's personal financial situation in any way. This can include financial advice, digital investment and financial planning tools, and much more .
The goal: to find answers to widespread money worries. Possible approaches could be:
- Helping employees create a financial safety net
- Help with planning income and expenses
- Tools to make investing easier – whether it's saving for a vacation or a car, building a nest egg for your child, or simply having a reserve fund of your own
- Advice on the most attractive interest rates and dividends, suitable insurance policies and other financial products
Employers who embrace a culture of financial wellness are already providing employees with support structures that can help them get rid of money worries and gain financial know-how. All of this may still sound exotic to some – soon it will be the standard.
Why companies should invest in financial wellness?
53% of workers who participated in a recent survey ( Bank of America Merrill Lynch ) said they regularly have trouble concentrating at work due to financial stress and are less productive because of it.
However, f inancial wellness strategies are about much more than just optimizing quarterly figures. It's all about the long term: namely, through such strategies, m arket capital is created. If you can be seen as an attractive employer in this way, you will have an easier time recruiting and retaining the best professionals in the industry.
Financial wellness is important for all employees – from career entry to retirement
Benefits aimed at improving personal financial security are not only interesting for mid-career personnel (when it comes to providing for the family) or at the end of the career (when saving for retirement). Surprisingly, such benefits are even especially welcome among those who have just started their careers: college graduates and Generation Z young professionals.
Our revealing 2018 Employee Satisfaction Index z eightens that young employees need help managing their personal finances more urgently than any other group. Generation Z employees are almost twice as likely to have their personal finances audited as the baby boomer generation (for up to two-thirds of respondents, such an audit is due at least five times a year). And more than half of younger people said the thought of their own financial situation caused them feelings of anxiety.
High rent and property prices and a bpayable student loans mean Generation Z welcomes financial wellness benefits with a kiss hand. For companies, this means that they can't go wrong with such benefits – especially if it's important to them to be attractive to career starters. However, our study also shows that many companies have only belatedly realized that this is a trend that cannot be ignored. Only one-third of respondents said they had access to financial wellness benefits as part of their own professional activities. (And the few who have such benefits were not particularly satisfied with them.)
Where financial wellness already plays a role: some examples
Some of the most progressive employers are now beginning to fill the gap left by many companies when it comes to the financial well-being of their employees. They give their staff tools to help manage money worries and better pla n personal budgets. Here is just a selection of w hat the topic of Financial Wellness can be implemented:
- Klarna offers new parents e 20-week parental leave with full pay, plus childcare for the first two years of the child's life. This helps Klarna employees give their attention to the growth of the child rather than that of the pile of bills.
- PwC helps employees pay off student debt with extra cash benefits.
- Google will pay the partner of a deceased employee 50% of his or her salary for 10 years. In this way, the company wants to relieve its employees of some of the worries that arise when one has to deal with the depressing thought of "What will happen to my loved ones when I am no longer here??" fusses around.
4 steps to an effective financial wellness program
1. Use employee data
Collect, analyze and use all the data about your employees that is available to you. This will help you address the specific concerns and needs that arise from an employee's financial and demographic situation. Whether it's repaying the student loans of Generation Z dependents, getting the best mortgage rates for mille n nials, or retirement planning for … well … all employees.
2. Offer continuing education and coaching
Good financial management and effective planning sometimes starts with a simple tip. Today's workers are fortunate in that there is an entire industry devoted exclusively to personal finance solutions, offering them bundled together for entire total workforces t . Ranging from digital investment services to personal coaching, employers can pave the way for greater financial stability for their employees if they want to. And often, small actions are all that's needed : More than 45% of b eleaguers in one of our recent studies said their satisfaction could be significantly increased simply by learning more about the financial options available to them .
3. Increase employee retention through tailored communications
Use technologies that enable communication tailored to employees' life situations. For example, if you want to draw attention to the retirement benefits they fund, you can tailor the tone and content of the relevant messages to those groups for whom that information is particularly relevant. Or consider the example of child care: if you provide benefits e r related to this issue, you can arrange to send the relevant messages only to those parts of the workforce that are just back from parental leave.
4. Offer appropriate financial tools and services
From a solution according to the motto " One size fits all" has in the end no one something. Make sure your offer really fits the specific life situations your employees are in. Where do they need support? What are you worried about? Stay ahead of the curve and offer the most advanced solutions personal finance management has to offer – from robo-saving to investing apps. Lifeplan, for example, is setting a good example: Lifeplan customers are the first in the world to have personalized financial planning advice sent directly to their smartphones as a push message . Often the simplest solutions are the most effective .
You want to learn more about financial wellness – from how employees spend their money to its impact on their health? If so, download our free e-book today h erunter.