How Employers Can Support Employee Financial Wellness
Employee debt is a significant issue that affects many employees’ financial well-being and productivity. Poor financial wellbeing can lead to increased absence and reduced productivity, which is putting the topic of employee financial wellness firmly on many organizations’ radar.
A 2022 survey undertaken by EBRI (the Employee Benefit Research Institute) of organizations who have implemented financial wellness programs highlighted that close to 90% of those surveyed said that the programs were effective in regard to:
employee productivity,
overall financial wellbeing of their employees,
attraction/retention of employees, and
employee satisfaction
In another report conducted by Sunny Day Fund, they found that while Retirement Savings and Health Savings are still table stakes, they found that for most workers, emergency savings as a benefit is a top-three reason they would join or stay with a company.
Sunny Day Funds’ blog also reported that PwC’s 2022 Employee Financial Wellness survey found that financial stress impacts on employee retention, mental health, and productivity, resulting in lost work hours.
Why Support Employee Financial Wellness?
As the research has backed up, many organizations are seeking to actively support their employees’ debt reduction journey in order to benefit from better employee retention, increased engagement and increased productivity.
Here are some ways organizations can support employees’ debt reduction efforts.
Offer Financial Education
Offering financial education is an effective way to support your employees’ debt reduction efforts. You can provide financial literacy classes or seminars, which can help your employees develop effective money management skills. By educating your employees on financial management, they can learn how to reduce their debt and avoid taking on more debt in the future.
Provide Financial Counseling
Financial counseling can help employees create personalized financial plans and address financial challenges. Employers can offer counseling services that include debt management, retirement planning, and investment strategies. This counseling can help employees develop a path towards financial stability.
Provide Flexible Work Arrangements
Flexible work arrangements can help employees save money and reduce their debt. For example, you can offer hybrid working options that can reduce employees’ commuting costs or offer benefits which cover travel costs. You can also provide flexible scheduling, which can enable employees to work part-time and take on a side hustle to earn extra income.
Offer Financial Assistance
Financial assistance can help employees pay off their debts faster. You can offer a debt reduction subsidy that matches a portion of your employees’ debt reduction payments. You can also provide low-interest loans that can help employees pay off high-interest debts, such as credit card debt.
Implement Debt Reduction Programs
As a business, you can implement debt reduction programs that can help your employees reduce their debt. For example, you can offer debt consolidation programs that enable employees to combine their debts into one manageable payment. You can also provide financial counseling services that can help employees develop a personalized debt reduction plan.
In conclusion, supporting your employees’ debt reduction efforts, whether that be overall debt or student loan debt, is a win-win for both the employees and the business.
By offering financial education, debt reduction programs, flexible work arrangements, and financial assistance, you can help your employees become debt-free, which can lead to better employee retention, increased productivity, and a more financially stable workforce.
Payitoff can help.
If your current financial wellness offering doesn’t include debt management tools, talk to us.
