Did you know that 57% of employees in the United States said that finances are the top cause of stress in their lives? 59% reported that they’re not able to keep up with rising costs of living. For employers, you might not realize the relevancy of these challenges to your workforce. But supporting employees in achieving a level of financial wellness is important for a number of reasons.
There’s a strong link between financial wellness and mental health. Not being able to focus on work tasks due to worrying about finances results in lack of productivity. Over time prolonged financial stress can lead to chronic mental health issues. Employees impacted by this find it hard to function effectively, which impacts their work.
This low morale can lead to workers quitting for new positions. But could this be averted if they feel supported by their employer? In this article, we seek to answer the question: Why is financial wellness important and is it becoming a cornerstone of employee retention?
Why is Financial Wellness Important?
Employers with thousands of workers struggle with employee retention. With little to differentiate between jobs except pay, employees are quick to take up other opportunities offering more. But each time a worker leaves, it comes at a cost. Skills and knowledge lost, training time invested in lost, plus the cost of finding and training up a replacement.
By contrast, if employers have practical ways of supporting employees and helping them achieve financial wellness, it’s an incentive to stay. It’s one of the reasons that more employers are implementing total rewards programs.
1. Reduced Stress and Improved Focus
Many frontline workers have little knowledge or time to research financial planning. They live from week to week thinking about how to earn enough to pay rent and their bills. Saving often feels beyond their reach, especially in current times with the cost of living continuing to rise.
They unavoidably bring this stress with them to work. Even if they don’t feel up to the task, they go to work anyway, worrying that if they miss a shift, their situation will become even worse. On a daily basis they’re not asking questions such as why is financial wellness important. They live the reality that it is, every day, and this makes it harder for them to focus.
What they need from employers is help in finding answers. Facing increasing expenses and with no knowledge of how to change their situation other than finding another better paying job, increases stress and distracts them at work.
Most people have been conditioned not to talk about finances or financial difficulties. But knowing they need help and having an offer freely available from an employer can make a huge difference. Then they’re not just coming to work to earn, they’re also learning.
There’s the practical side where simple mechanisms, such as how they get paid, can help them budget and manage finances better. Then there’s the emotional benefit. For employees, knowing they don’t have to try to figure out everything on their own, especially when they’re already overwhelmed, goes a long way to reducing stress.
2. Increased Job Satisfaction and Loyalty
When there’s support from an employer, it makes employees feel more valued. It communicates to employees that companies have an understanding of what’s important to them and what they need. The value of this should not be underestimated in terms of employee loyalty.
Loyal employees tend to be more engaged and have a positive attitude at work. This has the potential to influence their co-workers creating a more positive working environment. Happy employees don’t go seeking other employment opportunities. By contrast they will frequently put in extra effort to help their team become more effective at what they do.
The benefits to the company are obvious – increased productivity and a more positive internal view of the company. If you can help employees answer questions such as “why is financial wellness important,” it helps to build a better company culture where people feel that they’re more than just a number within an organization.
3. Competitive Advantage in Talent Acquisition and Retention
People talk. Especially in industries where there is very little differentiating one company from another. Companies that look after their employees attract higher caliber people in the hiring process.
A contributing factor is that they take a more thoughtful approach to employee benefits and how to reward people to reduce employee turnover.
Hiring is becoming increasingly expensive. New employees take time to get up to speed and require training. Both of these factors have associated costs to the employer. This is one of the reasons why employee retention is becoming the number one priority for companies. Finding ways to reward and engage with employees is a big part of this. Studies show that investing in existing employees gives companies a competitive advantage.
How to Support Financial Wellness as Part of a Total Rewards Program
Total rewards programs can be tailored to include different components to support financial wellness for employees. While the primary goal may be to empower employees to become more financially stable, the business benefits are an equally strong driver.
With little to differentiate between roles and responsibilities for front line workers, what will make job seekers choose one company over another is perceived benefits. A good wage, plus a positive culture and supportive working environment, is very attractive. Having the technology in place to support an effective total rewards program helps to strengthen your reputation and gain a competitive advantage as an employer of choice.
The cost savings of retaining good employees for longer should not be underestimated. Increased loyalty, improved productivity and employee advocacy, while unseen, all bring with them a real dollar value. An effective total rewards program can help companies realize that dollar value.
Juice Financial is a leading provider of advanced FinTech solutions designed to streamline the administration of employee compensation systems. As these become more complex to meet modern employee expectations, flexible technology solutions are vital.
Find out how Juice’s solutions can support your total rewards program to generate maximum benefit for both you and your employees!