The physical health of your employees is important, as is their mental health. But one aspect of well-being that’s often overlooked? Their financial health. Especially when 75% of Americans worry about their finances, financial health is intertwined with physical and mental health. Although it isn’t possible to control things like inflation, increased living costs, and the overall uncertainty of the current economy, there are things employers can do to help their workers breathe a little easier when checking their bank accounts.
With nearly 9 in 10 Americans saying that there’s room for improvement in their financial stability, employers can play a huge role in helping them better plan, manage, and think about their money. Financial wellness is something companies can support even without increasing wages. In this article, we’ll explore five ways to improve employees’ financial wellness without additional spend.
Why is it important to promote financial wellness in the workplace?
Today, 73% of Americans say their number-one cause of stress is their finances—even more than politics, work, and family. And younger generations are even more stressed, with over 80% of millennials and Gen Zers saying that managing their finances is stressful.
However, things can improve with the help of thoughtful employers like yourself. Although offering livable wages should come first, other options like Earned Wage Access, providing free saving tools, and other financial wellness programs can go a long way. Here’s how you can help increase the financial wellness and freedom of your employees without any additional spend:
4 Ways to improve employee financial wellness
1. Understand your employees’ current financial health
Before you can help your employees, you need to get a sense of their financial health–and employees also need to take stock of their finances. By doing an employee financial health assessment, you can better understand what your workforce really needs from a financial wellness program—whether that's support for retirement savings, financial education, or help with their savings goals.
What should an employee financial health assessment include? Here’s a list of the most important questions to ask. You can ask them via an anonymous survey so your employees don't feel self-conscious about answering.
- How prepared are your employees for unexpected life events? Do they have an emergency fund?
- What is your employee's average net worth? Is it positive or negative?
- Do they have the income and resources they need to live comfortably?
- Do they have the income and resources to live the life they desire?
- What percent of their debt would be considered high interest, such as credit cards? Is it more than 50%?
- Are they actively saving for retirement?
- Are they actively investing in low-risk long-term investments?
- Do they have enough insurance coverage—whether it be health or life?
Once you get a sense of the financial needs of your workforce, you can move on to structuring a financial wellness program that will suit their specific needs.
Top tip: Are you ready to cater to the needs of the modern workforce beyond financial wellness? Here’s how to align all your employee benefits with today's workers.
2. Offer financial education and literacy programs
With reports indicating that in 2022 Americans lost an average of $1,819 due to lack of personal financial knowledge, improving financial literacy should be a top priority.
Hosting financial wellness seminars and workshops, providing access to financial planning tools and resources, and encouraging participation in financial literacy programs are all great ways to help your employees improve their financial literacy. Money is not just about having dollars in green and expenses in red—there are investments, interest rates, inflation, and all sorts of other concepts that employees need to understand before achieving financial freedom, and not all are taught in school.
The best thing about financial education and literacy is that it doesn’t have to cost you a cent. Free tools and financial literacy resources are everywhere on the web. Additionally, banks and other financial teams from founders and business owners are often happy to provide financial education for free.
Top tip: Start a book club in your company, maybe starting with Rich Dad, Poor Dad by Robert Kiyosaki, or The Psychology of Money by Morgan Housel—two well-known books that have provided time-tested financial tips.
3. Support your employees’ major expenses
Money matters, especially when life gets complicated. Helping your employees better manage their money in crucial life moments is essential to helping them improve their financial health. You can help your employees prepare for life’s unpredictable expenses by explaining about Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA). These are ways in which your employees can save for medical coverage in a tax-advantaged way.
There's also childcare, which is said to be one of the reasons why women are the most impacted in economic hard times. In fact, during the pandemic, women were the hardest hit by job losses, with more than 5.4 million net jobs lost between 2020 and 2022. Being able to support working parents during such an important time isn't just beneficial for them, but for the economy. In fact, providing reasonable child care to parents can add $3 trillion to the global economy. With an already shrinking economy, helping support its future is good for your employees, you, and the world.
4. Make it easier for employees to access their money
Your employees work hard for their money, so the best thing you can do is make it easier for them to access it. Online bank accounts that are directly embedded in employee payroll are one way to let them access their money easily—wherever they are.
Additionally, offering Earned Wage Access where employees can get on-demand access to up to 50% of their earned wages can be the relief your employees need when life gets complicated. Dealing with unexpected medical bills, car repairs, child care needs, and emergencies can result in overdraft fees, increased debt, and a vicious cycle of stress and lost work hours. Support your employees by offering EWA, gaining more flexibility and control over their own money, and keeping them from having their budget derailed by unforeseen expenses.
Earned Wage Access can also become a competitive benefit that helps you attract and retain more employees. A win-win-win situation.
Be the employer that helps workers achieve all their financial goals
Promoting financial wellness in your workplace is something that benefits everyone involved: you, your employees, and the greater economy. Of course, there are more things you can do to promote your employees’ financial stability and wellness, but the strategies discussed here should be your first steps—and they won’t add additional spend. See how Branch can help you make payroll seamless and more flexible for you and your employees.
Ready to learn more? Here are four emerging financial health trends in the workplace.