Why and How You Should Nurture Financial Wellness at Your Firm

financial planning for employees

It’s one of the top trends in employee benefits right now, and it’s cheaper than retirement plan funding or health insurance. It’s called financial wellness. When done right, it benefits both the employees of small businesses and their employers.

“It’s the number one trend in employee benefits because it has a good return on investment,” said Carol Craigie, managing partner and coach at Fiscal Fitness Clubs of America.

While it may seem like it’s outside the interest of employers to help employees deal with their individual financial issues, it actually helps improve work quality. In fact, it allows employees to focus on the job at hand and have a higher level of satisfaction with work. Getting finances under control decreases “presenteeism,” when employees come to work but aren’t physically or emotionally able to do their jobs because they’re dealing with personal issues.

Much like a health wellness plan, financial wellness can create financial peace for your employees. “Money is the number one stressor in America and the number one cause of divorce,” Craigie said. “When you feel like your finances are under control and you have a plan, stress levels drop.” With lower stress levels come lower medical bills, according to research.

Craigie said financial fitness programs can be divided into three areas: education, coaching and peer support. What a small business provides depends on the employer’s budget and goals.

Here’s how each area can impact employees:

Education

Education takes many forms in financial fitness. It can be an in-person class offered during work hours, a live or recorded webinar employees attend during or after work, or guided access to paper or online educational tools.

As for presentations, “accessibility is important,” Craigie said. Not everyone who needs financial help works traditional 9-5 hours or can take a lunch hour off for a webinar or a live presentation. “If it’s recorded, that helps people,” she said. Craigie cautions against using education-only programs, where the presenter comes at no cost but is selling financial products.

There are great online tools as well, but employees don’t always know where to find them or how to use them, she said. A websites like mint.com, for example, is an excellent cash flow tracking tool and it’s free. With a 15-minute orientation, employees can understand how to use it. There are also online retirement projection sites or debt reduction sites, though employees might also need some help understanding how to set them up and how to adjust the numbers to show different scenarios.

Coaching

“Knowing is not the same as doing,” Craigie said. After the information is given to employees, they may have questions about how to take action on what they have learned. Knowing that they should evaluate their homeowners insurance doesn’t mean they know how to actually do it. Coaching can be by email, phone or in person. The coaching component can increase the program’s cost, but it also increases the effectiveness, she said. “The goal should be to empower employees to take power over their finances,” said Craigie.

Peer support

While not everyone wants peer support, it can make a difference to those who participate. In Craigie’s experience, more women join financial peer support groups than men, and they find value in sharing goals and strategies as well as being accountability partners. “They share their goals, but not their financial situations,” she said. “That empowers people to take it on and own it, and stay with it.”

How to pay for financial wellness programs

There are a number of ways employers can offer financial fitness programs, depending on their budgets. Some employers pay for the entire program, choosing the particular elements to include. Some use a shared cost model, subsidizing the program and asking employees to pay a nominal amount to participate.

The other model is to organize it for employees but require them to pay the cost. The financial wellness company might offer a discount to employees if the employer is willing to send out the marketing information and host a few free webinars.

“The employees pay the cost, but it feels like employer is offering something,” Craigie said.