We asked Oswald Financial’s Dave Kulchar and Mike Gheen for their expertise on employee financial wellness programs.
Question: What is an employee financial wellness program?
Answer: A well-crafted employee financial wellness program is tailored to the organization’s population and includes assessments with consideration for individual circumstances. It also provides ongoing education programming and monitoring to help employees budget, manage debt, plan for life events and retirement.
Q: What is the importance of employee financial wellness?
A: A large percentage of employees indicate that finances are a big stressor. 70% of Americans live paycheck to paycheck and 64% can’t cover a $1,000 emergency without borrowing money. Furthermore, financial stress is the #1 cause of stress-related illnesses and the number one reason for divorce. People who are financially stressed also incur health costs that are 24% higher.
Financial stress is not just a burden on the individual, but affects the employer as well. Stress drives productivity down because financial wellness worries are a distraction. In all of these ways, financial wellness is a crucial part of overall wellness for both, the employee and the organization.
According to Mercer, effectively designed financial wellness programs can help employers:
- Boost productivity, because employees aren’t distracted by finances.
- Improve physical health of employees (high levels of stress are more prone to illness)
- Increase employee engagement and retention
- Create more affordable retirement opportunities
Q: What are the elements involved in a financial wellness program?
A: The first element is always an assessment, followed by the compilation of results and analysis. Based on the results, a custom education schedule is developed with workshops and seminars geared towards the need of the workforce. Another very significant element of a financial wellness program is the reassessment (typically on an annual basis) of the impact of the programming and a recalibration/creation of an education plan for the upcoming year.
Q: What are some of the concerns employers have when putting together a financial wellness program?
A: The concerns that employers often bring to the table are easily addressed and mitigated, but the typical employer will be concerned with how much time and effort will be involved and the level of employee utilization (i.e., how many employees will take advantage of the program).
Employers are also concerned with the cost of implementing such a program but the 2014 Consumer Financial Protection Bureau report states that organizations can save $3 for every $1 spent on a financial wellness program.
Q: How do I start an employee financial wellness program at my organization?
A: An employer interested in starting a financial wellness program should work with an advisor who has resources to meet the needs of the workforce and who has the experience with participant education programming and design and who will diligently guide them through the process, address and alleviate concerns and take the stress out of the process.