Over a third of employees in a recent Voya survey report not fully understanding any of the benefits they enrolled in during open enrollment. This number increases the younger the workers, with 54% of millennials reporting they don’t understand their benefit selections.
What does this tell us?
Employees are passing on benefits they don’t understand and unknowingly leaving thousands of dollars on the table while they’re at it.
This lack of benefits education affects you as the employer as well, decreasing engagement, worsening employee experience, and losing money in payroll and health premiums.
To improve employee financial wellness (and thereby, your own), you need a financial wellness program that helps employees get the personalized financial and tax guidance they need.
But before we get too ahead of ourselves, let’s start from the beginning…
What is financial wellness for employees?
Financial wellness refers to a person’s overall financial health and ability to minimize money-related stress. Prioritizing employee financial wellness can improve productivity, increase retention, and attract new hires, among other benefits.
According to Voya, over a fifth of workers are interested in having access to financial planning and education tools. And a full 87% of employees want help with personal finances.
And what exactly is involved in financial wellness? We’re glad you asked!
Employee financial wellness involves many initiatives, such as financial wellness education, workshops, 401(k) matching, student loan repayment, or coaching sessions.
But again, a large part of it boils down to helping them understand their current benefits and making better benefit selections based on their personal situation. (Many employees expect just this and end up seeing significant savings, such as $1,900 per employee from a single benefit that was previously overlooked.)
The benefits of employee financial wellness
Improving employee financial wellness has pluses for both employees and employers. Here’s why.
Employees will be equipped with the skills, knowledge, and tools necessary to develop and support successful financial and life outcomes.
In turn, this means employees:
- Reduce stress. Finances are the top cause of employee stress, taking a toll on their mental and physical health, sleep, and self-esteem.
- Increase productivity. A whopping 85% of financially healthy employees believe they are more productive at work.
- Stick around for longer. A PwC study found that financially stressed employees are twice as likely to look for a new job.
Employers feel the effects of their staff’s financial health as well as it:
- Increases efficiency. Almost half of employees admit that worrying about finances distracts them from work.
- Strengthens recruitment and retention efforts. Financially-stressed employees are more likely to be attracted to another company that cares more about their financial well-being, PwC notes.
- Allows them to stay competitive. A quarter of organizations are adding or expanding existing benefits to help employees manage financial stress since the start of the pandemic.
- Literally saves the company money. Many benefits benefit the employer in addition to the employee when utilization rates go up, saving both sides money in payroll taxes!
In short, employee financial wellness is the gift that keeps on giving.
How to choose the right financial wellness program for your employees
An employee financial wellness program is typically an addition to a standard employee benefits package and goes beyond solely offering retirement planning and investing information.
No two programs or softwares are created equally. When looking for the best option for your organization, seek out the following features:
- Easy-to-navigate user interface. This makes onboarding and usage for both employees and employers that much easier, reducing HR administrative burdens while effortlessly increasing engagement within the platform.
- Robust content library. The program should also have a robust content library filled with non-jargony guides and resources so people across the financial literacy spectrum can use them.
- Life event support. Choose a program that has financial and benefits guidance tailored to employees’ unique family and life circumstances. (Say goodbye to HR intervening in employees’ personal matters.)
- Year-round expert help. With year-round, in-app access to CPAs and CFPs, employees will receive accurate, tailored financial help at their convenience around the clock, not just during open enrollment.
Pasito: The future of employee financial wellness in the workplace
There you have it, folks. Employee financial wellness in a nutshell.
Not only does prioritizing the financial health of your team make life easier and more enjoyable for them, but it will also propel your bottom line and is a smart retention strategy.
Our advice? Don’t go it alone.
Recruit the help of a financial wellness program tailored to the needs of your organization and team members. Recruit the help of Pasito.
Our financial wellness software combines health and wealth to personalize total rewards. Through the employee dashboard, Pasito’s team of financial professionals offers users personalized benefits guidance and calculates contribution levels to pre-tax accounts based on unique life circumstances. Through the employer dashboard, we help companies improve employee engagement and experience while saving money on payroll and health premiums.
Every Pasito user can personalize, accelerate, and track success in their individual platforms while enjoying a unified, money-saving experience.
It’s a win-win.
For more on how our employee financial wellness software can deliver your company a more engaged workforce while saving you money on payroll and health premiums, get in touch.