Employee Well-Being: Financial Wellness – Employers Play a Role - Disability Management Employer Coalition (DMEC)

By Kristin Tugman, PhD, CRC, LPC

VP Health and Productivity Analytics & Consulting Practice, Group Insurance
Prudential

Financial wellness is top of mind for employers because they recognize the important role it plays in contributing to their employees’ productivity and workforce management. A recent Aon survey noted that 89% of employers plan to expand their financial wellness tools in 2016 and 80% noted they are doing so in their quest to improve employee engagement.¹

Further it is clear that employers are on the right track as according to the American Psychological Association, stress and financial stress in particular has a negative impact on health as well as cognitive abilities that reduce decision making skills.²

Financial well-being is a combination of many factors. At the core of financial wellness is a simple concept, having enough money for day to day expenses with some more in savings for emergencies. Most experts advise to have between 3-5 months in savings as a best practice. However, building that type of savings requires individuals to gain an understanding of their personal spending habits and learning effective budgeting techniques.³

Many people need help budgeting, saving, and maintaining their savings to reach a modest level of financial wellness. They may look for guidance and education on how to save better. They may be looking for information about the benefit options available at work, as well as investment options that can help them best achieve their financial goals

More employers now realize the correlation between financial stress and productivity is real and that they are in a unique position to promote mutually beneficial solutions. Prudential’s research says 82% of surveyed finance executives agree that their companies would benefit from having a workforce that is financially secure and 78% feel that employer should assist employees in achieving financial wellness during working years. And, according to a recent study by Bank of America, 79% of employers believe workplace financial solutions lead to increased productivity. By making financial guidance and education available on topics like budgeting, employers are able to help provide access to financial planning that can put employees on the right path to meet all their financial goals. Likewise, thoughtful benefit programs can help protect an employee’s savings. Return-to-work offerings as part of a disability plan help get employees back to their whole salary in a timely manner.

These types of employer-sponsored financial well-being programs have the potential to decrease the risk of financial stress. As employers consider strategies to improve the well-being of their employees, they are hearing from many sources that financial wellness programs are an effective way to begin. Employers are in a unique position to influence and provide information relative to the importance of overall well-being, and employees who experience well-being are more positive about their work experience and experience less time away from work.⁴