Financial wellness is defined as having financial security and financial freedom of choice in both the present and the future. The more proactively prepared individual can handle life’s financial circumstances, they are more balanced in their responses to potential stressors such as being retirement ready or handling life’s emergencies that may come up that require dipping into the savings account.
The 2016 Employee Financial Wellness Survey conducted by PwC shows 40% of all employees surveyed find it difficult to meet their monthly household expenses. What, exactly, are they concerned about? Included in the list:
- not having enough emergency savings;
- not being able to retire;
- not meeting monthly expenses;
- being laid off; and
- increased debt.
Even knowing these financial concerns, though, employers do not always know how to alleviate the personal impact they may have on an employee’s life. These financial concerns are brought into the workplace, causing general distractions and stress which contributes to increased blood pressure and depression. In turn, these conditions can cause absenteeism, wage garnishments, disability/workers compensation claims, or substance abuse and even theft. For the employee, this cycle worsens over time and all the symptoms harden making it more difficult for the employee to work themselves out of the cycle. For the employer, this can impact the business’ profitability, decrease employee productivity, and increase health insurance rates, overtime, and employee turnover.
Creating a financial wellness plan starts with having the right company philosophy. An employer would be wise to understand the correlation between financial concerns and impacts on business – and from there, understand how to help alleviate the impact on employees.