Do you wish your employees would give their job their undivided attention while at work? You may need to do more to support them financially to make that happen. There’s nothing more distracting than worrying about covering monthly utility bills or not being able to save enough for retirement.
The stress may leave some employees searching for payday loans instead of doing their work, or missing work altogether when the pressure becomes too much to handle. When you support your employees with financial wellness benefits, they can let go of stress and worry and refocus their energy on succeeding in the workplace.
In 2021, Bank of America reported that 46% of employers included financial wellness education in their benefits package, increasing 6% in 2020. Millennial employees came of age during the Great Recession. Generation Z employees are coming of age in the middle of a pandemic.
It’s not hard to see why both of these generations emphasize financial wellness and security. So when polled by Bank of America, Generation Z and Millennial employees reported feeling more financially well due to these programs. As these generations become the primary source of labor in the workforce, it’s essential to cater to their needs beyond health care and retirement.
That’s where we come in. BrightUp partners with employers to deliver comprehensive financial wellness benefits to their employees. That’s because we believe that hard-working people deserve hard-working financial benefits.
Many companies are turning to financial wellness programs to provide employees with information and education about budgeting, debt management, and financial planning. When you provide BrightUp to your employees, they receive a suite of wealth-building and wellbeing tools, all in one centralized platform!
If this sounds like something your company is interested in, keep reading. We’ll share more about the impact of financial stress on employees, and discuss how and why your company should consider providing financial wellness benefits.
Symptoms of Financial Stress in Employees
Financial health is a critical component of well-being. Research supports a connection between financial savings and healthy lifestyle habits, which can also translate to better levels of overall health and lower healthcare expenses.
So what does it look like when an employee is financially unhealthy? There will be some obvious and subtle signs to notice.
Stressed Employees in the Workplace
Happy employees mean productive employees. Unfortunately, this also means unhappy employees are less productive. While in small doses, stress can be a good motivator for efficiency and productivity – such as working diligently toward a short deadline or lofty goal.
But what happens when stress in the workplace becomes too much? Behaviors will change, and productivity will decrease.
So what does a stressed employee look like? There are some tell-tale signs.
Six signs of a stressed employee:
- Irritable or moody
- Tiredness
- Poor time management
- Apathy
- Reduced quality of work
- Easily distracted
A survey conducted by the International Foundation of Employee Benefit Plans (IFEBP) reports that workers are struggling and stress about things like debt (66%), saving for retirement (60%) and covering basic living expenses (48%). Employers also reported that their employee’s financial stress had begun to impact their job performance. This translated to the workers’ inability to focus, absenteeism and tardiness.
Due to these attitude and behavioral changes, productivity levels are sure to suffer. In addition, this type of stress may cause problems with hitting deadlines, providing quality customer service, or interpersonal issues.
Financially strained employees may also have a long-term impact on your employee health benefits plans. Thrive, a company dedicated to providing tools that reduce employee stress and burnout, reported the top five ways financial stress can impact physical health:
- Deteriorating physical health
- Increase in blood pressure
- Negative respiratory issues
- Sleep issues
- Increased rates of tension
- Anxiety and depression
Over an extended period, physical symptoms can develop into illness and disease. Covering these employees with healthcare plans will, in turn, become more expensive for your company and your employees.
Stressed Employees Outside of the Workplace
While it’s harder to see the impact of financial stress on your employees outside of work, there may be some subtle signs to pick up on.
According to the Society for Human Resource Management (SHRM), 31% of Americans reported feeling finance-related anxiety, and 19% reported financial-related depression. Of those polls, Americans making less than $30,000 annually were more likely to have sought help from a health practitioner for financial stress (20%). That’s 15% more than Americans earning $60,000 or more.
Mental health issues can take a significant toll on employees in and outside the workplace. For example, suppose you notice a decline in your employee’s mental health. In that case, their symptoms are probably worse outside the workplace, because they tend to hide their symptoms from their peers.
Beyond mental health, you may be able to pick on a few actions your employees take outside the workplace due to their financial health problems:
- Not contributing to retirement savings
- Withdrawing emergency funds from retirement savings
- Requesting overtime hours
- Repeated payday loans or cash advance requests
- Applying for a debt consolidation loan
- Taking time off to deal with financial issues
- Lack of sleep
When employees are financially stressed, it’s likely because they don’t feel confident in meeting their ongoing or emergency financial commitments. When they need money and don’t have excellent credit, it’s hard to know where to turn for help. However, more and more employees have the chance to turn to their employers through their benefits programs.
Defining Financial Wellness
In contrast, what does a financially healthy employee look like? They should be easy to spot too.
Financial wellness is a term used to describe one’s ability to manage their current and future financial needs. Wellness encompasses a full view of financial health and considers how finances can impact stress levels. Financial wellness is a critical part of overall well-being, like physical and mental health.
Let’s explore five obvious indicators of financial wellness:
- Ability to manage money to meet day-to-day expenses
- Holding back from spending beyond one’s means
- Having buffer savings to cover financial emergencies or unexpected costs
- Setting and meeting savings and retirement goals
- Has manageable debt or no debt
Financially stress-free employees may be more present at work. They may be more likely to go with the team to get lunch off-site. But, most importantly, they’re more likely to have a more positive outlook and higher morale levels than your financially stressed employees.
There’s no doubt that employers prefer their employees to come to work happy and healthy. So what are they doing about it? First, revisit their employee benefit plan to ensure it is providing the right mix of benefits to fit their employee needs.
Build Resilience with Financial Wellness Benefits
The employer’s relationship with their employees’ financial wellness is critical to individual and company-wide success. Employers are directly responsible for their economic well-being. The rates of compensation and the benefits the company provides constitute a significant portion of a worker’s ability to be financially well.
Why Is Financial Wellness Important to My Company?
The pandemic put incredible strain on companies and their employees. And while our economy has begun to recover, many employees still struggle to feel financially stable. As a result, many leave their current jobs to find better pay or more benefits.
In fact, in April 2021 alone, 4 million workers left their jobs to find a better opportunity. Amid the Great Resignation, employers must consider new ways to help employees feel more resilient in these troubling times. As a result, employee financial wellness benefits are becoming more and more popular to attract and retain employees in a tumultuous job market.
As an employer, you have the opportunity to improve your employee’s financial success. That success will cascade into their role in the workplace and lead to success for your business.
In this competitive labor market, having a robust employee benefits package can make or break your success in hiring an employee. You don’t want to lose a great employee to your competitors. Financial wellness benefits can give you the edge you need to attract your talent.
A competitive financial wellness benefits program can also help you retain your most talented employees. You can reduce employee turnover by showing your employees you genuinely care about their well-being and growing company loyalty.
Workers can get a salary or hourly pay in countless other places. Specialized wellness benefits can make all the difference.
Employees can learn the skills they need to make the most of their paycheck through financial education. Employees can also benefit from resources, like a financial phone app, to help them manage their day-to-day transactions. Having a better handle on the day-to-day will lead to savings, retirement, and debt reduction.
Expanding your benefits package to include financial wellness will:
- Boost employee morale and loyalty
- Increase employee engagement
- Improve health and mental wellness
- Improve spending habits
- Improve focus and performance
At this point, you’re probably thinking – sign me up! Where do I start?
Elements of a Strong Financial Wellness Program
An effective financial wellness plan is designed to match the needs of the employees it’s intended to serve. They offer an educational component for those who need it and provide advice and tools to support workers in implementing what they’ve learned. Let’s review some of the standard and newer financial wellness benefits.
Common Financial Wellness Benefits:
- Retirement Benefits
- Short & Long Term Disability
- Financial Education
Growing Financial Wellness Benefits:
- On-demand Pay
- Emergency or Small Dollar Loans
- Financial Counseling
- Financial Planning Tools
Retirement Benefits
Retirement benefits have been the main focus for what companies consider financial wellness benefits. But it’s a long-term goal that rarely benefits the employee during their time at your workplace. So while it’s a great place to start, a 401(k) program doesn’t help their short-term financial priorities.
Disability Insurance
Short-term and long-term disability insurance can provide a great safety net for your employers. And while it’s excellent coverage for a qualifying emergency, there are so many other surprise expenses that could derail their financial wellness. As a result, employers have an opportunity to offer more wide-ranging safety nets in on-demand pay programs or employer-sponsored emergency loans.
Financial Education
Financial education programs can offer basic and advanced educational experiences centered around financial literacy. It should be more than just sharing financial wellness tips. Employees can learn more about finances and feel more confident with their money management.
Financial education is one of the cornerstones BrightUp was built upon. We believe a personalized approach to financial education can produce better outcomes. Employees who use BrightUp to improve their financial literacy will get matched with financial education content from thousands of sources based on their unique interests.
On-Demand Pay
On-demand pay offers a chance for employees to receive their wages as they earn them. It’s most commonly offered to hourly employees. On-demand payment can give employees access to a portion of their paycheck before the end of the pay period to cover timely expenses. Employees can then receive the rest of their paycheck on payday.
SHRM reported the increasing popularity of flexible earned wage access. In 2019, 5% of companies offered this benefit. It will increase to 23% by 2023. They also shared that employers saw a 20% turnover reduction rate when this benefit was available in the case of restaurant workers.
Emergency Loans
Employer-sponsored emergency or small-dollar loans are another great way to provide employees with a financial buffer when a sudden expense arises. Companies can partner with financial institutions to provide safe and affordable small-dollar loans to help hardworking employees meet immediate financial needs.
In addition, giving employees access to more compassionate capital can help them avoid getting trapped by high-interest payday loans or racking up credit card debt. BrightUp provides emergency loans when your employees need it most, with a single-digit APR.
The Social Policy Institute highlights the effectiveness of offering small-dollar loans to employers. Most employees (77%) used one or more nonbank loans before having access to an employer-sponsored loan. That includes 54% of respondents who previously used high-cost payday loans, auto title loans, or pawnshop loans to cover their expenses.
Financial Coaching & Counseling
While financial education is a great tool to improve financial literacy, some may need more guidance to help them break bad habits and form new ones. That’s where financial coaching or counseling can help. Many employees want ongoing advice for financial matters that are most relevant to them.
A dedicated financial coach can help individuals navigate debt management, budgeting, filing taxes, and saving for retirement more confidently. Having someone nearby to help you sort through a particular financial challenge can provide immense peace of mind.
In the same study from the Social Policy Institute, 64% of employees experienced a boost in their credit score after receiving credit-building education and counseling. In addition, 23% of those with a subprime (under 620) or near-prime (620-659) credit score achieved a prime score 18 months later.
Can you imagine playing a role in helping an employee improve their credit score and get out of debt? It can be a wonderful feeling.
With BrightUp, you can provide your employees with financial coaching not one, but THREE different ways. BrightUp Buddy is an in-the-moment, text-based option for quick responses to common financial questions.
For those who need more guidance, a financial coach is available by phone and employees will receive a quarterly or annual review of their finances by certified financial advisor. All at no cost to them!
Financial Planning Tools
Financial planning tools are another great option to include in your financial benefits plan. An all-in-one application can give employees the power to review, analyze, and manage their finances in one central location.
For example, with a tool like the BrightUp app, employees can centralize their accounts, analyze their spending, create and track a budget, and calculate how long to pay off their loans. These tools can cut down on financial literacy barriers and put the power back in the individual’s hands.
These are just some of the newer financial benefit options growing in popularity. They’ve all been proven to provide immediate positive outcomes and long-term return on investment for employers.
Connect with BrightUp to Launch Your Financial Wellness Program
If you’re an employer, HR team member, or benefit plan administrator, BrightUp is here to help you launch a successful financial wellness program. Creating lasting behavior changes can be challenging with an internally managed program. The best wellness programs leverage a suite of resources from experts in the industry.
We can help your company build employee financial literacy and help them channel that knowledge into action – delivered with compassion and genuine care for your employees’ outcomes.
BrightUp was built on five pillars: compassion, capital, content, coaching, and community. When you provide BrightUp to your employees, you’re giving them access to a full suite of wealth-building and well-being tools.
Contact a BrightUp representative on our website today. You can also call us directly on (833) 513-1302 or drop us an email at hello@getbrightup.com.
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