By: Mudita Upadhyaya, DrPH, MPH, MHA
Employer support for employee financial wellness is more relevant now than ever before due to the financial ramifications of the COVID-19 epidemic. COVID-19 has led to an unprecedented increase in financial and emotional stress. A large number of employees are working from home receiving lesser pay, while millions of others have lost their jobs. The average individual retirement account and 401(k) balances are low, and many employees are unprepared for an extended economic downturn or recession and are uniquely vulnerable to economic distress.
What is financial wellness?
Financial wellness, simply put, refers to financial literacy and the capacity to successfully manage financial expenses. Consumer Protection Financial Bureau defines financial well-being as “a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life”.
Why should employers invest in financial behaviors?
A recent PwC employee wellness survey (sampling more than 1,100 American workers nationwide) indicated that over 54 percent of U.S. employees are financially stressed. COVID-19 may have further worsened this situation in many households; some of which may be facing significant short- and long-term economic threats that could have a lasting effect on the physical and mental well-being of your employees. A financially stressed employee may mirror symptoms of fatigue in the short-term, and financial stressors can possibly contribute to long-term mental and physical health issues, resulting in distracted and unproductive employees who are disadvantaged in the process of bouncing back to mental and financial wellbeing in the future.
How can employers help?
Equipping employees with information, tools, and resources to manage and balance day-to-day spending with achieving long-term financial stability is the first step employers should take to help their constituents. It is important that employees are able to identify their financial weakness and strengths and make realistic, smart, long-term, and short-term financial goals.
For starters, EAP financial counselling services are a great but often overlooked and underutilized benefit available to employees.
Here are four steps key to building a successful financial wellness program:
- Listen to your employees to prioritize financial wellness: It is strategic to recognize what employees are stressed about, and how your role as an employer can help contribute in resolving their concerns. Wellness managers may reach out to the employees directly (via a wellness needs assessment survey or via focus group meetings) or collaborate with the Employee Assistance Staff to identify critical stressors in order to offer the financial program best tailored to your employee’s needs.
- Search for a financial program vendor that best aligns with your circumstances: There are many agencies, like the Society for Human Resource Management (SHRM), that offer a comparative list of financial wellness program vendors that may suite your company size, budget, and specific financial wellness requirements. If your budget does not allow for you to include a financial wellness program, employees can utilize free tools and resources from Consumer Financial Protection Bureau (gov) designed to manage finances and make SMART (Simple, Meaningful, Achievable, Realistic, Time-sensitive) financial decisions.
- Offer a customizable and holistic financial well-being program: In addition to offering the traditional retirement-focused webinars, voluntary information sessions, income calculators, basic money management tools and online resources, employers may also want to explore programs that that are customizable, offer 1:1 financial coaching (e.g. in-person, over the phone, or online), and are able to integrate financial and emotional well-being services (in collaboration with Employee Assistance Program) to provide a customized resolution to your employees’ specific needs.
- Monitor, evaluate, and make necessary changes: It is important that the wellness managers assess the utilization and impact of their wellness program to determine what works and tweak the program if needed. Communication is key, here. Although your role as an employer gives you a powerful insight into your employee’s financial well-being, there is no single magic pill to ensure wellness. Communicate with employees to know what’s working and, more importantly, what isn’t.
Register to get the training and materials needed to facilitate the one-hour “Living Financially Well” program for your workforce.
Dr. Mudita Upadhyaya is the Senior Program Manager – Wellness at the University of Texas Health Science Center at Houston. Using her over 15 years of experience in public health and health promotion, Dr. Upadhyaya develops program monitoring and evaluation using mixed methods, while also conducting in-depth policy and evidence analysis to guide and facilitate public health program planning and implementation.