Why is Financial Wellness important?
Employee stress adversely affects business
Financial well-being has now become a key concern for the majority of American businesses. Various industries now emphasize providing financial wellness programs to their employees; it has become a key to many organizational successes.
A survey from Bank of America supports this claim:
“More than 50 percent of employers are now offering financial wellness programs, compared to 24% in the last year.”
Let's clarify with a hypothetical situation based on real-life:
Altro and Mtro are two competing companies.
While Altro’s having a hard time retaining employees and keeping their performance charts high, Mtro is reporting smoother operations on their end. The latter’s employee retention rate is excellent, and their time management software also shows timely clock-ins and less missed shifts.
How do Altro and Mtro differ from each other?
Both operate in the same industry, with similar pay scales and healthcare benefits. However, faced with bleak employee performance, Altro’s leadership did a little research and discovered a growing trend and possible cause. After tuning in to their workforce, they saw the problem: financial stress.
Here are the reasons financial wellness matters to employees and is a growing phenomenon:
1. Financial health and mental wellness go together
Financial problems can adversely affect a person's behavior. They can cause mental strain and damage one’s physical health by interfering with all other areas of life. The abnormal rise of stress can lead to depression, insomnia, and foggy and distracted thinking.
Poor financial well-being is strongly associated with cognitive deficit and underperformance at work. Hence, a capable employee shows up as less productive at work.
We can all become more productive and efficient at work when the workplace respects and supports our financial wellness!
2. Financial wellness solutions are easy to implement
The good news is that implementing financial wellness programs for employee empowerment are surprisingly straightforward and cost-effective. You may consider inviting experts to give budgeting advice or conduct interactive financial wellness workshops.
Additionally, you could offer wages on-demand platform that allows your employees to liquidate a portion of their earned wages and directly deposit it to their bank account whenever they wish. Pair this with insightful corporate financial wellness seminars to educate your staff. Try digging deeper into the options you wish to offer, to see if they have any additional benefits.
Regardless of how you choose to incorporate financial literacy in your business, your employees will take notice.
3. Help increase employee engagement and retention
Employees are attracted to employers that offer financial security and a flexible work schedule to improve their quality of life during turbulent times. Thus, implementing any strategies that emphasize the impact of financial wellness can lead to improved employee retention and engagement rates.
Being financially literate will enable an employee to make sound decisions for themselves and the business they support.
How can you assure financial stability for employees?
The following are some of the most popular and cost-effective financial benefits that employers are likely to adopt:
1. Access to Wages On-Demand
Wages On-Demand, also commonly referred to as Earned Wage Access (EWA), lets employees withdraw the pay they’ve earned instantly without having to wait for their scheduled payday. It allows employees to become financially resilient and empowers employers to enhance productivity and employee satisfaction.
Companies like OrbisPay offer access to earned wages with zero additional cost to employers by simply integrating with their payroll provider. There’s no change in the employer’s cash flow and it is painless to set up.
Request a free demo to understand how simple and smooth it is to integrate into your workplace.
2. Emergency funds
Life happens every day. It is full of surprises - our car breaks down suddenly or we get ill when we least expect it. This is the time we look for ways to access our earned wages or the emergency fund we put aside for a rainy day.
The need to have emergency funds in place escalated after the COVID-19 pandemic for most Americans. Employee Assistance Funds (EAF), also known as Employee Relief Funds and Employee Crisis Funds, assist employees when they are faced with unforeseen hardships that place financial stress on them and their families.
The fund enables you to assist your employees financially by partnering with an external nonprofit organization, enabling the fund to cover a greater variety of hardships and reduce the burden of administering such funds.
3. 401(k) Plan
The 401k plan is the most common and known financial wellness benefit that most employers are offering and can offer. Using a 401(k) plan, employees can have a portion of their paychecks saved in a long-term investment account. Their employer may contribute some money too. You can sign up for 401(k) accounts for your employees, who can automatically enroll in the service once they are onboarded with you.
The service helps employees save money for their retirement. At the same time, companies can significantly lower employees' financial stress through a robust 401(k) retirement plan. Although 401(k) plans are not suitable when you need cash immediately, they offer rewarding retirement benefits.
You can also read more about 401(k) plans here.
Financial well-being summed up
Now more than ever, we need to focus on the financial well-being of our employees. The pandemic has taught us the importance of being prepared for unexpected setbacks that life may throw at us. When more than half of working Americans live paycheck to paycheck, providing them with the means to feel safe becomes imperative. As we all struggle to meet our weekly and monthly expenses, we seek ways to get hold of the cash that we need the most.
Find out how OrbisPay can help you build a financially resilient workforce while enabling you to become a financial wellness champion for your employees. Contact us here. We look forward to speaking with you.