Employers Need More Education on Benefits of Financial Wellness for Workers

Despite effect on employees’ productivity, many employers still haven’t implemented a plan

Employers could be doing more to help their employees’ allay stress, according to a survey of business owners and professionals. A report released at the end of May by FinFit, which provides financial wellness solutions, found 78% of respondents don’t offer a loan program to help employees deal with emergency situations, even though almost half said financial stress has sometimes affected their employees’ ability to work.

In fact, over 86% of respondents said that financial stress has had some effect on their workers’ productivity, with 14% saying financial stress “very often” affects employees’ ability to work.

“Even if you’re making a decent salary, it is difficult to concentrate on work when you’re worrying about how to pay this month’s bills, or to find the money to cover a health emergency, a necessary car repair so you can travel to work, or an educational expense for a child,” David Kilby, president of FinFit, said in a statement. “We are seeing more employers recognizing that this is a real issue and as a result, starting to think about possible solutions.”

Over 70% of respondents, who were business owners or executives at companies with 200-500 employees, acknowledged that more of their employees are living paycheck to paycheck.

Part of the challenge is just that many employers are unaware of the benefits available in a financial wellness program, but another aspect is privacy.

“The second most commented challenge relative to having these types of programs in the employer work force is the employer is hesitant about getting involved in the employee’s personal finances,” Kilby told ThinkAdvisor on Monday. “They don’t recognize the impact that the challenges for that particular employee are having on the organization. It’s an awareness process more than it is a development process.”

Almost 47% of respondents said explaining benefits once a year during open enrollment for about an hour was sufficient. However, 40% said their company should spend an hour a month explaining benefits to their workers and how to get the most out of it.

Kilby said that’s because a lot of employers aren’t “fully comprehending…the benefits that are available to individual employees and the impact that participating today can have on their future financial position. I think it’s a lack of comprehension more than a lack of desire.”

Employers may still need convincing that wellness programs are an effective way to deal with the fallout of stressed employees. Less than half agreed that they were. Almost 40% said they weren’t sure.

Kilby said that regarding financial wellness programs, “the interpretation in the marketplace today is about investment advisory services just to a retirement plan or things of that nature, and not to the overall education and betterment of the employee throughout all facets of financial development.”

Kilby went on to cite a "great article that came out today that indicated over 45% of employees could not get access to $2,000 given a 30-day period to meet that challenge. I think that speaks volumes to why for those that have retirement accounts, why these 401(k) loans and what have you are being impacted at such a heavier rate to borrow against their financial futures,” Kilby said.

He noted that’s the value of financial wellness programs—to “educate people to leave those retirement accounts alone and not take away from their financial future and instead find alternative solutions to solve those immediate challenges.”

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