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The Ultimate Guide to Employee Financial Wellness: Strategies for Small Businesses to Enhance Financial Security

Expanding financial wellness benefits and what that entails for HR

Nick Schurk

by Nick Schurk - June 6th, 2023

In today's economic landscape, investing in employees' financial well-being is not merely a luxury but an essential strategy, especially for small businesses. The realities of rising unemployment, dwindling emergency savings, skyrocketing medical costs, and the fallout from COVID-19 have rendered the financial security of workers across the nation precarious at best. As research suggests, the pandemic has doubled employee financial stress, prompting a reevaluation of the importance of robust employee financial wellness programs.

A small business that chooses to make its workforce's financial wellness a priority does more than merely bolster productivity. It nurtures a milieu of motivated employees firmly grounded in financial security. Amid the profound changes brought about by the pandemic, the need for these programs has never been more evident. It's not just about benefits anymore but about resilience and preparedness.

The current trend among employers involves benefits such as matching emergency savings, a strategy that has taken the spotlight as an effective way to help employees buffer against unforeseen expenses. It's an acknowledgment that a financially secure employee is productive and engaged. In this climate of uncertainty, adding emergency savings accounts to employee benefit programs isn't just a smart move; it's imperative.

So, whether you're in HR or an employer looking to attract and retain talent, now might be the perfect time to re-evaluate your approach. It's time to think beyond traditional benefits and expand financial wellness programs using a BenAdmin solution. Remember, investing in your employees' economic well-being isn't just good for them - it's vital to the success and resilience of your business. This comprehensive guide will explain the impacts of these wellness programs and why their implementation is a necessity, not a choice.

What are financial wellness benefits? 

Typically, in addition to more traditional benefits, financial wellness benefits and programs are financial support and resources that are more expensive than the standard retirement accounts and investing information. It often includes tangible financial assistance, educational tools, resources, counseling, and materials to provide greater understanding and actionable advice about an employee's economic situation, planning, and outlook.

And they're an exceptionally hot topic right now for many reasons:

  • The Great Resignation that's forcing employers to get creative with their talent recruitment and retention strategy.

  • The negative financial impact that COVID-19 has caused for people across the globe.

  • The growing popularity of various wellness programs at work in general.

Given the recent focus on mental health and wellness and what we know about how financial stress can negatively affect mental and physical health, it makes sense for financial wellness to become the next priority.

In practice, financial wellness benefits can come in many forms, such as:

  • Enhanced retirement planning, including 401(K)s, 403Bs, etc.

  • Loans or pay advances

  • Matching emergency savings

  • Student loan support

  • Budget counseling or management support

  • Employee Assistance Programs (EAP) that offer financial resources

  • Debt management counseling and services

  • Financial counseling and planning services

  • Personal finance tools, calculators, and apps

  • Financial education that comes in the form of courses, seminars, or otherwise

While determining precisely which benefits are the best for an organization should be determined on a case-by-case basis, according to a 2021 survey by PricewaterhouseCoopers, pandemic financial stress negatively impacts businesses from a productivity, retention, and health perspective. Specifically amongst employees whose financial pressure increased during the pandemic:

  • 45% have reported that finances have been a distraction at work

  • 72% would be attracted to another company that cares more about financial well-being than their current company

  • 57% avoided having a medical issue addressed due to cost

Given that, businesses that begin to expand into financial well-being will see benefits ranging from increased productivity, a reduction in the financial stress of their employees, improved health outcomes, and increased employee retention, engagement, satisfaction, and organizational commitment.

Why are employee financial wellness benefits important?

Financial stability is a critical factor affecting an employee's overall well-being. Employees' financial stress may impact their health, productivity, and even longevity within the company. Implementing an effective employee financial wellness program is the solution to these challenges, bolstering the business while fostering a nurturing environment for staff.

Boost Employee Productivity

Employees struggling with financial worries are likely to be less productive. An employee financial wellness program provides the tools and resources needed to alleviate financial stress, enabling employees to focus on their work. This increased focus enhances productivity and ultimately improves your business's bottom line.

Improve Employee Retention

Offering a financial wellness program is a strong statement about the value you place on your employees. This gesture of goodwill can foster loyalty among your staff, reducing turnover rates and helping you retain top talent. In addition, having financially secure employees who feel valued boosts morale, leading to a positive and productive work environment.

Attract Top Talent

In today's competitive job market, small businesses must offer more than just a paycheck to attract top talent. A financial wellness program is an attractive benefit that could set your business apart. Prospective employees, particularly millennials and Generation Z, prioritize benefits such as financial wellness programs when choosing an employer.

Building an effective employee financial wellness program

Creating an impactful employee financial wellness program requires careful planning and thoughtful execution. Here are some of the critical elements to consider:

Personalized Approach

Every employee has unique financial goals and challenges. A personalized financial wellness program can cater to these diverse needs, offering tailored solutions and resources. This approach fosters deeper engagement, making your program more effective and valued.

Comprehensive Financial Education

Financial literacy is the cornerstone of any successful employee financial wellness program. Offering comprehensive financial education, from basic budgeting to advanced investment strategies, empowers your employees to make informed decisions about their money.

Accessible Tools and Resources

The effectiveness of your program hinges on its accessibility. Providing user-friendly tools and resources ensures employees can engage with the program effortlessly. Digital platforms, webinars, and in-person workshops can offer diverse ways for employees to learn and grow financially.

How can HR make a case for offering or expanding financial wellness benefits?

  1. Bring the data: Research has given us robust statistics, and we know a few things definitively. 1.) Employees are financially stressed. 2.) Employers who offer financial wellness benefits are at a competitive advantage in the talent search. 3.) Offering financial wellness benefits offers a return on investment that impacts productivity, retention, commitment, and bottom line. Gathering your key statistics and talking points will allow you to lead with a data-driven argument before discussing the benefits you'd like to offer.

  2. Find internal sponsors for it: Ideally, your presentation shouldn't be the first time anyone from the administrative leadership team has heard about this proposal. Finding at least one (but ideally more than one) sponsor to support the proposal will help you build buy-in ahead of your pitch and strengthen your proposal by getting other leaders' insight into what could be missing or what considerations you didn't account for, for example.

  3. Build support around it: Reach out to the employees for a pulse check through a survey or focus group to build additional support and learn their challenges and which financial benefits would help them the most. For example, student loan support only makes sense for a worker population experiencing those hardships. By not understanding and accounting for what employees need, employers will miss out on many benefits and make financial investments that ultimately don't serve or help anyone.

  4. Bring the business benefits to the conversation: Opening your presentation with statistics documenting the need for financial wellness, followed by data and employee feedback, is a strong case – but be sure to highlight the benefits for the business too. Connect the dots between what reduced stress means for business outcomes and why increased engagement and commitment are good for the bottom line. This will ensure that your presentation and proposal have accounted for every angle. 

12 tips to improve employee financial wellness

To gain insight into the variety of financial wellness benefits companies offer and their impact on employees, we asked 13 CEOs and founders about their experiences. From offering a variety of economic wellness benefits to enhancing engagement with benefits, discover the diverse approaches and challenges faced by these leaders in implementing financial wellness programs.

Offer a Variety of Financial Wellness Benefits

"We offer a variety of benefits designed to help our employees achieve financial stability and security. These include retirement savings plans, financial education resources, and access to financial advisors.

"One of the most significant impacts of these benefits has been our employees' increased sense of security and peace of mind. Knowing they can access resources and support to help them plan for their financial futures has helped reduce stress and improve overall job satisfaction.

"One of the biggest obstacles we faced was ensuring that our employees understood the value of these benefits and how to take advantage of them. We had to invest time and resources to educate our team members about the various programs and resources available."

Matthew Ramirez, CEO, Rephrase

Provide a Comprehensive Financial Workshop

"One of the most impactful programs we introduced was a comprehensive financial workshop. This program included budgeting, debt management, retirement planning, and investment strategies workshops. We also provided one-on-one financial counseling sessions for employees who needed personalized advice.

"We saw increased employee engagement and productivity as employees felt more secure and less stressed about their financial situations. Not only did this release financial stress and boost our absenteeism and turnover rates, but it also injected our company with a much-needed dose of employee engagement.

"There were challenges too, like getting employees to participate. Some employees were reluctant to discuss their financial situations. We promised complete confidentiality in this program and ensured the maximum help from our company possible to them."

Johannes Larsson, Founder and CEO,

Provide Child Care Support

"With inflation on the rise, one of the most significant employee financial wellness benefits is child care and support, especially for single parents

"Child care has become difficult and extremely expensive. As an essential employee need, offering child care support is a huge bonus that boosts employee loyalty and retention."

Max Wesman, Chief Operating Officer, GoodHire

Provide Online Financial Wellness Workshops

"One financial wellness benefit we offered our remote workshop was an online financial wellness workshop. This program had multiple parts. 

"First, we reimbursed the cost of I Will Teach You to Be Rich by Ramit Sethi, a financial wellness book, for employees. Then, we brought in a financial advisor to speak to staff about concepts outlined in the book. We also incentivized employees to start a 401(k) by a specific date by offering a one-time contribution. 

"Offering these programs in a virtual work environment is tricky. However, by giving adequate time and notice about these components, we had robust participation and a lot of goodwill and gratitude from the staff who participated. Since we work on flexible schedules, we structured the program so employees could do most of it in their own time. Employee engagement and retention improved."

Michael Alexis, CEO, Virtual Team Building

Include Comprehensive Financial Wellness Offerings

"We offer comprehensive financial wellness benefits, including financial education programs, a retirement savings plan with company matching, and access to financial counseling services. These benefits have positively impacted employees' financial literacy, retirement preparedness, and overall productivity. Challenges during implementation include managing costs, employee engagement, and tailoring benefits to our diverse needs. 

"We addressed these challenges by careful budgeting, active promotion, fostering a supportive culture, and maintaining flexibility in benefit offerings. Through these efforts, we've supported our employees in their journey to achieving financial security, which has enhanced productivity and a more positive work environment."

Josh Amishav, Founder and CEO, Breachsense

Partner with Financial Management Companies

"As part of our benefits package, we offer comprehensive financial guidance and support. We've partnered with a reputable financial management company that provides valuable services to our employees.

"Through this partnership, our employees can access expert advice on various financial aspects, including retirement and investment planning, debt management, and wealth management. 

"The financial management company conducts personalized financial reviews and counseling sessions to help employees understand their current financial situation and develop tailored strategies to achieve their financial goals.

"Our employees feel more confident and empowered in managing their finances. They've gained valuable insights and practical skills to make informed financial decisions."

Luciano Colos, Founder and CEO, AI Pitch Deck Generator

Offer a Free Mint Subscription for Budgeting

"Mint is an app that allows you to track your income, expenses, and investments all in one place. It alerts you if your spending gets out of whack and suggests areas to save more. It's just a convenient and helpful tool, which our team has taken to. 

"Of all the financial resources I've considered financial wellness benefits, the one with the most significant daily impact on team members has been a cheap subscription to a budget-tracking app.

"As the benefits administrator, implementing and managing has been straightforward. Because we use QuickBooks and Mailchimp (other Intuit services), I could add on Mint accounts for employees through our enterprise account. Easy!"

John Ross, CEO, Test Prep Insight

Remember: Diverse Benefits Boost Satisfaction

"We prioritize the financial wellness of our employees and have implemented a comprehensive range of benefits to support them. Our offerings include:

  • Financial planning and education programs.

  • Retirement savings plans.

  • Health and wellness subsidies.

  • Flexible work arrangements.

"The impact has been transformative, with employees reporting increased satisfaction, reduced stress, and improved productivity. We've seen higher employee engagement and retention rates by addressing their financial concerns.

"Implementing these benefits presented challenges, such as selecting the right programs and providers aligned with our diverse workforce's needs. Additionally, communication and education helped employees understand and use benefits. We overcame these problems by listening to employee feedback, adjusting programs, and creating a supportive culture.

Vikas Kaushik, CEO, TechAhead

Offer Flexible Lifestyle Spending Accounts

"We offer Lifestyle Spending Accounts to support overall health and well-being, including financial wellness. Our team can access monthly, quarterly, and annual funds to spend on anything from groceries and utilities to professional development and online mental health subscriptions or anything in between. 

"Our team can spend their stipend on financial education, contribute to retirement savings plans, access financial advisors, afford debt management assistance, etc. Our software also handles IRS compliance, so they don't have to worry about claims come tax season.

"Financial wellness benefits result in a more engaged and productive workforce. We've seen over 90% engagement with our stipend program, reducing financial stress, improving overall well-being, and increasing job satisfaction."

Amy Spurling, CEO & Founder, Compt

Implement Flexible Paydays

"I provide flexible paydays to my employees. Getting out of debt and making ends meet can take a while. It's challenging for employees with a comprehensive list of bills to spend money on necessities. 

"You may take action to address this issue and lessen their stress and ensure your employees' financial stability by letting them select when they get paid. Flexible paydays are helpful to those having financial difficulties. Avoiding past-due payday loans will be their biggest success. 

"By offering flexible paydays, you can keep your staff content while enabling them to handle their everyday obligations. Employees with access to financial programs report higher levels of professional satisfaction."

Joe Li, Managing Director, CheckYa

Consider Financial Education for Productivity

"In a world where pensions will be but a dream, giving your team confidence in their financial futures is essential. 

"Ling has a strong up-skilling culture and offers access to several courses and documentation, including a powerful Udemy financial crash course. Team members can take the course at their own pace and learn how to manage their finances best. People less stressed about money are likely to be more productive and creative. Educating employees on financial care is a clear benefit."

Simon Bacher, CEO, Co-founder, Ling App

Enhance Engagement with Benefits

"Our employee financial wellness benefits include 401K matching up to 4%, stock options, the ability to contribute pre-tax income into accounts such as HSA and 529s, and access to online tools that help employees budget and plan for their retirement.

"We've seen an increase in employee engagement and satisfaction, positively impacting their productivity. We've also seen an increase in our employees' financial literacy and understanding of benefits they may not have known about before.

"One challenge was ensuring that our employees were educated and understood how to maximize their value. We created online resources and provided in-person training sessions to help our employees become more familiar with the new benefits. We also partnered with third-party providers to offer additional convenience and support."

Darryl Stevens, CEO, Digitech Web Design

Final thoughts

An already at-capacity HR team might hesitate to bring in new benefits requiring even more administration, but GoCo can help.

Benefits - With GoCo, you don't have to worry about adding new lines of coverage or types of benefits — Admins can efficiently work with benefits advisors to add additional benefits, handle benefits deductions with ease, and run open enrollment 100% digitally. Employees can view potential financial benefits plans and costs at-a-glance and decide what's right for them. GoCo's BenAdmin software empowers employees to make the right choices for their own lives. GoCo also has native 401K integrations with apps like HumanInterest to make the process even more seamless.

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