3 Reasons Companies are Choosing Financial Education Benefits
Financial education is becoming increasingly popular as an employee benefit. It’s known to decrease money-related stress by giving employees control over their money instead of letting it control them. As a company benefit, financial education increases productivity and improves employee morale. There are countless reasons companies are choosing financial education benefits for their employees. Three of those reasons are job satisfaction, employee health, and mutual benefits for employees and employers.
Company benefits heavily influence which jobs employees accept and where they choose to stay long term. A survey by SHRM showed 92% of employees indicated benefits are important to their overall job satisfaction. Similarly, almost a third of employees said their benefits package was the primary reason for either looking elsewhere for work or choosing to remain with their current company.
Employees who have high job satisfaction are more likely to perform well at work than those who are dissatisfied, unhappy, or stressed at work. Employers who provide benefits that focus on wellbeing find their employees more engaged at work. This is because employee wellbeing is cared for and they feel safe rather than stressed. SHRM states, “Employees who feel psychologically safe are more likely to put in extra effort to see the team or company’s mission achieved.” Benefits such as health initiatives and financial wellness programs improve employee wellbeing and engagement.
Good employers care about their employees’ physical and mental health. Financial stress is detrimental to both. Health Advocate states, “Stressed workers have an elevated risk of mental health problems, ranging from anxiety and substance abuse, and perhaps the most significant, depression. In fact, stress and clinical depression—the two often go hand in hand—trail family crisis as the second and third most significant problems in the workplace.”
However, financial education can reverse those effects. A study by Enrich showed financially educated employees had a 23% reduction in financial stress. And those with a 3-month emergency savings fund had the lowest stress levels of all. It may be easy to blame the pandemic for financial stress, but that is not the underlying problem. Benefits Pro states, “It’s important for employers to understand that the root cause of financial stress is not COVID-19 or even debt itself…The real cause of financial stress is low levels of financial literacy that translate into poor financial behaviors.” The obvious solution is financial education.
Especially in the post-pandemic era, financial wellness programs are increasing in popularity. Employees are now making an extra effort to get their finances in order and take care of their health. Employee Benefit News says, “Wellness programs are one of the top employee perks. Employee wellness has been a major area of concern throughout the pandemic, as stress, depression and anxiety have plagued employees…Wellness programs like exercising and financial assistance are increasing in popularity as employees seek ways to manage stress and build healthier habits during the pandemic.”
Financial wellness programs are mutually beneficial to employees and employers. Employees are happier and more productive at work when they are not distracted by financial stress. Financial stress costs employers significant amounts of money because of employee distraction and absenteeism. According to My Secure Advantage, “97% of employees concede to working on or thinking about personal finances during their work day.”
But financial wellness programs help reduce employee stress levels, so employees are better able to focus on their work. Benefits Pro says, “Although not new, employer-provided financial wellness benefits have gained momentum over the past few years as employers seek ways to improve the holistic well-being of their employees. Employees who are healthy physically, mentally and financially are more likely to bring their best selves to work. They are also more likely to be more engaged and productive, boosting business results for their employers. Financial wellness is no longer a ‘nice-to-have’ benefit. With financial stress costing employers nearly $5 billion per week, it’s now a strategic imperative.”
Additionally, financial wellness programs cost employers significantly less than medical leave, absenteeism, or turnover. According to Health Advocate, “An estimated one million workers miss work each day because of stress, costing companies an estimated $602 per employee per year. And absenteeism is to blame for 26 percent of health-related lost productivity in business.” Meanwhile, financial wellness programs cost a fraction of health-related productivity losses and can help remedy the problem.
Furthermore, financially educated employees better understand how to take advantage of additional benefits. Companies who offer benefits such as 401k plans risk wasting money and resources if employees cannot use them. Zenefits says, “Especially if you’re a company that offers stock options and other more complex types of compensation, you might want to consider financial wellness benefits. Ensuring that your employees have the resources they need to make the most of what’s being offered to them is a gesture they won’t soon forget.”
Financial education is a lifelong gift, essential to employee wellbeing. More and more companies today are offering financial education as a wellness benefit. This creates advantages for both employees and employers. Companies who offer financial education find employees who are happier, more productive at work, and who stay with the company longer.
Find out how 101 Financial’s Workplace Wellness program provides financial education as a benefit for employees.