6 Ways to Retain Top Talent with Financial Wellness
Beyond just handing over a paycheck, supporting your employees’ financial wellness plays a crucial part in employee happiness, performance, and retention.
Employee financial wellness might sound like a concern that’s outside your purview. As an employer, it would be understandable if your only goal was to pay your employees well and call it a day.
On the other hand, supporting your employees’ financial wellness plays a crucial part in employee happiness, performance, and retention.
Taking the time to encourage employee financial wellness will help your business level up from being just a transactional employer. Beyond just handing over a paycheck, you can make sure your employees are managing their financial worries, which are an enduring cause of stress in the United States.
Here’s your guide to why you should support employee financial wellness and the best ways to financially empower your business’s team:
Why Support Employee Financial Wellness?
Generally speaking, employee financial wellness helps achieve most of the main goals of HR for small business.
People in the U.S., no matter how well-paid or fiscally responsible they are, tend to have debt. Whether they spend with a credit card, have a mortgage, are paying off student loans, or all of the above, the average American household has $137,063 in debt. Chances are, a solid proportion of your team is paying down—-and likely stressing about—a significant amount of similar debt.
Helping employees to achieve a state of financial wellness will help them manage that stress. According to Prosperity Now, two-thirds of employees who are struggling financially report experiencing high levels of stress. Considering that more than 20% of workers spend five-plus hours on the clock each week thinking about their worries, your business may be losing untold productivity to this common, though avoidable, issue.
Prosperity Now also found that 20% of employees who are struggling financially are in poor physical health. (Meanwhile, of employees who don’t have financial worries, only 4% are in poor physical health.) This link between financial wellness and physical wellness means fewer sick days, and that employees can be more intentional with their PTO—taking it to recharge, rather than deal with illness.
Helping employees combat personal financial issues that lead to stress may result in greater employee retention, saving you additional money in the long run. A culture of support, transparency, positivity, and guidance can go a long way towards convincing employees to stay. Considering that, according to Zenefits, 63.3% of companies say retaining employees is harder than hiring them, anything you can do to combat turnover should be considered a priority.
Ways to Support Employee Financial Wellness
Supporting employee financial wellness is more concrete and straightforward than it might sound. Rather than vague encouragement or advice, it’s all about setting up programs and offering resources to employees. Here are five programs to set up to support the financial wellness of your entire team:
Get a better 401(k) for both you and your employees’ needs. Offering the structure of a 401(k) for retirement savings with a seamless plan will help ease your employees’ stress about their future retirement goals.
Even then, however, basic 401(k) benefits are just a gateway to more effective employee retirement benefits. For instance, offering a 401(k) match could attract top talent, improve employee retention, and make on-time retirement all the more feasible.
And the true cost of 401(k) matching is even more manageable than you might expect. That’s because investing in this program now could save your business untold sums down the road.
Employee Assistance Programs
An employee assistance program—or an EAP—is a fringe benefit that offers assistance to employees struggling with mental health challenges. Through an EAP, employees will be able to access mental health care with no out-of-pocket cost. For some, mental health care is a non-negotiable. But with the rising costs of mental health care, employees might not be able to afford it on their own—or will have to endure significant financial stress to do so.
Offering an EAP to your employees will not only help them avoid the financial stress of paying for costly mental health care, but it will also encourage them to seek the treatment that will help them thrive both in and outside of the workplace.
Debt Management Courses
Offering courses on debt management can help assuage this common source of stress. Such courses can not only help employees more efficiently pay down debt, but they can also help them feel more in control of their finances.
Either way, consider rewarding your employees for taking their course(s) by offering a party or catered lunch if the entire team reviews the resources you provide for them.
Financial Planning Classes
All employees—even those without debt—could learn a thing or two about financial planning. It’s long been said that schools should teach some of the basics of financial planning, from creating a personal budget to the most sensible retirement account based on your age and income, to utilizing HSAs and automatic savings programs. It may be up to your business instead to teach employees what steps to take to secure their financial futures.
Offer general financial planning courses to your team to help them understand the ins and outs of financial literacy. (The two sites above are good places to start, though a variety of courses* exist at different price points, including free.) The things they learn from these courses will help empower them to manage their finances and provide them with a sense of agency in handling their wealth.
Beyond just helping employees enhance their financial knowledge, these classes will help change your employees’ outlook, making them less stressed, more productive, and more engaged in the workplace.
Employee Benefit Information Sessions
Another way you can help make sure your team takes full advantage of all the employee financial wellness benefits you offer is to have your HR team provide information sessions to your employees. We suggest explaining how to best take advantage of the benefits you offer.
Make sure that every new employee understands every benefit they have access to, and provide refreshers to more tenured employees on a regular basis. After all, the onus will fall on employees to use the financial wellness systems you provide them with—make it easy for them to do so.
Takeaways for Employee Financial Wellness Programs
Supporting employee financial wellness is about making sure that your team’s most common stressor is manageable. Helping your employees address and overcome common sources of financial strain will have lasting positive effects throughout the life of your business.
All in all, offering financial wellness support to your employees will ultimately make financial wellness for your business as a whole that much easier to achieve.
*Betterment may publish content that has been created by affiliated or unaffiliated contributors, who may include employees, other financial advisors, third-party authors who are paid a fee by Betterment, or other parties. Unless otherwise noted, the content of such posts does not necessarily represent the actual views or opinions of Betterment or any of its officers, directors, or employees. The opinions expressed by guest writer and/or article sources/interviewees are strictly their own and do not necessarily represent those of Betterment.
About the Author
Eric Goldschein is an editor and writer at Fundera, a marketplace for small business financial solutions such as small business loans. He covers financing, marketing, human resource solutions, and small business trends.