Employee Financial Education Programs: Do They Really Work?

Today, employees are switching jobs in droves. So much so, this mass exodus has been classified as the Great Resignation. According to the U.S. Department of Labor, a staggering 11.5 million workers left their jobs during April, May, and June of 2021. And by most measures, this is just the beginning.

Now more than ever, it’s imperative for employers to use every tool within their arsenal to retain and engage top talent. Fortunately, there may be an often-overlooked, golden arrow within your quiver of tools: employee financial education through robust financial wellness programs. Let’s take a closer look at financial wellness programs to see if they live up to the hype.

FinFit can help your employees measure their financial health with evaluation tools and educational resources to encourage healthier, financially sound decisions that lead to financial stability. Contact FinFit today if you have questions related to your organization’s financial health – we’re here to help guide you down the path to employing a healthier workforce.

Financial Wellness…Buzz Word or Buzz Worthy?

Over the past few years, financial wellness has been on the mind of virtually every human resource professional. If it wasn’t, it is now because it has become a top focus for employees when assessing their entire compensation and benefits package. A financial wellness program is a holistic solution designed to:

• Help employees reduce money-related stress
• Alleviate financial problems
• Improve financial capability and decision-making
• Gain financial confidence
• Achieve financial security

How Should an Effective Financial Wellness Program Work?

To get started, each employee completes a brief financial wellness assessment. Based on the results, the solution should empower employees to identify their financial goals, assess the areas where assistance is needed — such as establishing emergency savings or setting up life insurance — and then provide actionable tools and resources to help them move closer to achieving financial freedom by creating a plan. After the initial phase, the financial wellness program should deliver timely, personalized, and targeted communications and insights to help employees identify the next best step on their journey. Whether it’s one-on-one financial coaching, robust seminars on retirement planning, debt reduction webinars, or other financial literacy solutions, the financial wellness program should meet your employees where they are and move them closer to achieving their financial goals.

But do these programs really deliver results? Here are a few key areas of financial wellness programs and the desired outcomes.

Stressing the Importance of Financial Wellness and Healthy Personal Finance

Let’s face it: Financial stress is a drain on your workforce. In fact, financial stress is the leading stressor in the workplace — more than all stressors combined:

• 10% – Health Concerns

• 12% – Relationship Stress

• 15% – Job Stress

• 59% – Financial Stress

As the predominant source of stress, financial stress impacts your employees in more ways than one. The best way to combat financial stress is by implementing a robust financial wellness program.

Financial Wellness Can Improve Mental Health

While financial wellness may be the employee benefits star of the decade, mental health issues have a co-starring role. And if you’re looking to improve your employees’ mental health, it makes sense to start at the greatest source of stress — their finances. According to the 2019/2020 Global Benefits Attitudes Survey, 49% of American workers suffer from depression, anxiety, or stress associated with financial matters.

More so, many adults lose sleep because of money-related issues, which can further exacerbate mental health issues. Specifically, those suffering from financial stress are 3.4 times more likely to have panic attacks and anxiety. A holistic financial wellness program is designed to target the underlying cause of financial stress by showing employees the necessary path toward a solution.

Employee Financial Education Can Improve Physical Wellbeing

While the mental and emotional hazards of financial stress have been well documented, financial stress can also take a physical toll on employees if it’s left unchecked. One study suggests employees with financial stress are 20% more likely to have painful migraines.

According to Bankrate, financial problems are the biggest cause of sleep loss, and it’s showing no signs of slowing. The study indicates 78% of U.S. adults are losing sleep daily because of concerns over retirement savings, managing student loans, credit card payments, and healthcare costs.

When you add in the desire to save for a new house or handle unexpected financial decisions, it’s easy to see how financial stress can reach dangerous levels. People with substantial financial stress were 13 times more likely to have a heart attack. Fortunately, a financial wellness program centered around employee financial education can help remedy these physical manifestations of stress.

Employee Financial Literacy Education Can Impact Your Bottom Line

While improved employee financial education offers real benefits for employees, employers share in the successes in more ways than one — making it a real win-win.

Improve Employee Retention

As all employers reel from the Great Resignation and look for innovative ways to not only retain and engage top talent but attract fresh talent as well, financial wellness should take center stage. According to research conducted on over 14,000 employees by FinFit, offering a financial wellness program resulted in an 18.8% increase in retention among salaried and hourly employees. Along the same lines, employers say offering a financial wellness program can transform the workplace:

• 76% of employers say financial wellness leads to higher levels of employee job satisfaction.

• 65% of employers say financial wellness leads to higher levels of loyalty for employees.

In the end, your commitment to improving your employees’ financial wellness could be the deciding factor in whether they leave or stay.

Bolster Employee Recruitment

According to a 2019 PWC Employee Financial Wellness Survey, 78% of employees experiencing financial stress would be attracted to a different company that demonstrates concern over their financial wellness. This means offering a financial wellness program could better position your business to recruit top talent from your top competition.

Employee Financial Education Can Drive Cost Savings

While it may be counterintuitive, offering a financial wellness program can have a direct impact on your bottom line — in the form of savings. According to the previously mentioned research by FinFit, offering an employee financial education program can lead to a $1,855 annual turnover cost savings per employee. To put this into greater perspective, it equates to almost $2 million in annual savings for every 1,000 employees. How could your organization reappropriate $2 million each year?

Drive Employee Productivity

The correlation between money woes and decreased productivity is clear: When your employees are worrying about money problems, they can’t focus on work. And this is no secret among organizational leaders: 80% of employers report financial stress has reduced their employees’ overall performance. Based on the PWC 2018 Employee Financial Wellness Survey:

• 43% of employees surveyed said finances have been a distraction while at work.

• 21% of employees surveyed said financial worries impact their productivity.

Instead of being focused on the task at hand, employees are worried about finances, leading to missing important information, errors, and miscommunications. However, a financial wellness program offers targeted solutions to help alleviate their financial concerns.

Enhance Employee Morale and Company Culture

If your employees are worried about the feasibility of retirement or how to pay the latest medical bill, they are more likely to be disengaged and irritable with coworkers and customers. And the research supports this: Salary Finance’s 2019 Employers’ Guide to Financial Wellness suggests employees with money worries are 4.3 times more likely to have beleaguered relationships with colleagues. This can lead to increased confrontations, reduced morale, and eroding company culture.

Help Reduce Employee Absenteeism

Most likely, your employees are losing focus, getting sick, and missing work because they are consumed by financial stress. And this isn’t a secret — 58% of employers view financial “illness” as a prevalent component affecting employee absenteeism. Even worse, increased absenteeism related to financial stress is rising, with stress-related absenteeism skyrocketing by more than 300%.

However, offering financial wellness and employee financial education programs are turn-key solutions designed to quell the swell. For example, employers who offer a financial wellness program experience an average of $348 reduction in operating costs per sick day.

Maximize Your Employee Benefits Package Spend ROI

We get it — you have limited dollars to spend on employee benefit plans, and employee financial education may not rank at the top of the list. However, if you’re looking to maximize your employee benefits spend and ROI, it’s time to take a second look at financial wellness and employee financial education programs. The Consumer Financial Protection Bureau suggests employers can expect a three-dollar return for every dollar spent on a financial wellness program.

Measuring the Success of Your Financial Wellness Program

Very simply, offering your employees a financial wellness program is key to unlocking their full potential. More than 8 out of 10 employers agree that financial wellness programs lead to:

• Greater employee productivity
• More loyal employees
• More satisfied employees
• More engaged employees

However, not all financial wellness programs are created equally. To get the real results you want and your employees deserve, accurate measurements are in order. Here are a few of the top measurable KPIs to gauge the success of your financial wellness program:

Financial Wellness Engagement KPIs

If your employees don’t engage with the program, it’s impossible for them to reap the benefits. As such, the following KPIs are a great starting point to measuring success.

• What percentage of your employees are enrolled in the program?
• What percentage of your employees actively engage with the program?
• How much has program use and engagement changed or grown over a specific period?
• What is your return log-in rate?
• How many pages does each user visit per visit?
• How much time are they spending on the employee financial education site?

Gauge Positive Employee Action

Measuring employee financial education engagement is important, but the true measure of success is how the program has prompted employees to change actions and behaviors. Look to measure:

• Change in retirement plan participation
• Change in retirement plan contribution rates
• Increased percentage of employees that have optimized the employer match
• Decrease in the number of 401(k) plan loans
• Increase in the utilization rate of other employee benefits
• Overall increase in employees’ retirement savings plans
• The number of employees who started emergency savings
• The percentage of employees that have changed their emergency savings rate
• The number of employees who started contributing to an HSA
• The percentage of employees who changed their HSA contribution rate

Gauge Employee Confidence & Sentiment

When it comes to your financial wellness program, it’s also about how your employees feel. Your employee financial education program should help you determine:

• How much do your employees actually like the financial wellness program and resources offered?
• Are your employees more or less confident after participating in the financial wellness program?
• Have your employees experienced a decrease in financial stress?

Reach Out to FinFit for Financial Wellness Solutions

Finding the best financial wellness and employee education program to suit your organizational needs can be a difficult task, but FinFit makes it easy. We are the oldest, largest, most comprehensive financial wellness and employee financial education provider in the United States. Since 2008, we’ve been dedicated to helping employers and employees improve their financial health and become financially stable. Today, we provide financial wellness solutions for more than 200,000 employers. However, the real impact story of our financial wellness and employee financial education lies in the lives and organizations we have helped change:

• 25%+ Improvement in Employee Retention

• 88% Increase in Employee Productivity

• 55% Reduction in 401(k) Borrowing

• 80% Decrease in Financial Savings

• 70% Increase in Monthly Savings

Ready to help your employees and transform your organization? Contact FinFit today by completing the online contact form. Or, for immediate assistance, don’t hesitate to call us now at 1-888-928-7248. In either case, an experienced Financial Pro at FinFit is waiting to help.