As an employer, it’s common to be reticent about talking to employees about their finances. But the need is dire: more than 60% of employees are anxious or scared about finances right now, according to a recent survey by Salary Finance, in large part due to the global pandemic that’s thrown our economy into a tailspin, leading to layoffs, furloughs, and even more financial instability. And this is hurting employers: our research has shown that organizations are losing up to 13-18% of their salary costs each year due to employee financial stress.
Your employees need you - and they trust you to do right by them. According to the Edelman Trust Barometer, 75% of people globally trust their employer to do ‘what is right’. Our own research supports that. In the December 2019 study we conducted of nearly 3,000 US workers, 79% of those with financial stress responded that they trust their employer to keep their personal financial situation private, and nearly three-quarters responded that they feel their employer cares about them and their wellbeing.
The opportunity is there for you to help your employees - and your bottom line. With that in mind, here are tangible steps to follow to put in place an effective financial wellness program for your business.
Know your workforce. Financial wellness means different things to different people. Often, the workplace benefits offered don’t meet the needs of those who are most financially vulnerable and require the most support. Understanding the needs of employees at all levels of the organization will help you to determine who is most in need and help identify the most appropriate solutions for your people. One easy way to do this is through an anonymous employee survey asking about areas of financial stress.
Build a robust business case. It’s critical to have a clear business case that can be understood by all stakeholders that shows the financial impact and also how financial wellness fits in with the overarching people and business strategy. For instance, if the survey tells you that your most financially stressed employees see getting out of debt as their top priority, the program goals should align with that outcome, and your business case should make clear how it will be measured.
Enable culture change. Talking openly about money can be particularly difficult for those that are struggling due to an ingrained feeling of shame or embarrassment. Unless this taboo is challenged, the most vulnerable will remain hesitant in engaging with their personal finance issues. Find people on your team (ideally leaders or managers) who feel comfortable sharing how they’ve overcome financial struggles in the past, and give all employees an outlet to discuss those strategies and stories together.
Focus on progress, not perfection. It can be difficult to know where to start, but keep in mind that the financial health of your employees will not improve until you begin. Employers that have implemented a meaningful financial wellness program began by addressing employees with the greatest need first, starting more open conversations about money, and building a broader program from there. The main thing is to start somewhere so you have a foundation to build on. Seek out low- or no-cost solutions (like Salary Finance) that lower the risk of implementing a benefit like this for the first time, especially with limited resources.
Communicate awareness and availability. Even the most expertly selected range of benefits will have little impact if employees don’t know about them or don’t know how to access them. Having a comprehensive, ongoing communications plan is critical. Organizations that communicate frequently, utilizing a range of channels, have the greatest levels of employee engagement and awareness. Ensure you understand employees’ communication preferences and design your strategy accordingly.
Measure the impact. Improving the financial wellness of your workforce takes time, as well as continued focus and resources. If the organization’s leaders can’t see the benefits and positive impact of the program, then it may lose priority. This is why it’s important to agree up-front on the criteria with which you’ll measure success. This could be participation rates, engagement with financial education content, employee retention rates, satisfaction survey responses, etc. These measurement criteria need to be an integral part of the business case.
The road to recovery for our economic systems is long, and there are bound to be hiccups along the way. But putting a financial wellness framework in place now will benefit your employees and your business now and in the long run.
Dan Macklin is CEO of Salary Finance, Inc. For more information on how to implement a financial wellness program, download the comprehensive guide here for free.