Why financial wellness is the key to boosting company loyalty and employee productivity

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Devin Miller
May 15, 2024

How would most employers define a high-quality and high-value employee? They’d almost certainly say that their top employees like what they do, are engaged and attentive on the job, are not absentminded or easy to distract, and feel satisfied with and well-compensated for their workplace efforts.

Unfortunately, the current economic climate is generating anxiety among even some of the best, most loyal staff members. The annual PwC employee stress survey found that more than half of full-time employees (60%) are stressed about their finances, and most (57%) say that finances are their biggest cause of tension. A similar proportion (59%) say that their compensation isn’t keeping up with the cost of living.

This should be a huge concern to any employer. What can companies do to help soothe some of this stress? Understanding the link between financial wellness and workplace loyalty is the first step to alleviating the burden of economic pressure and facilitating financial health among staff members.

What is financial wellness, exactly?

Before a workplace can take any steps to help improve financial wellness among its employees, the first task is to understand how to define financial wellness. 

This definition won’t look exactly the same for every employee, and there might be significant variations even between staff members with similar job titles and positions of responsibility. However, there are some key components of financial wellness that are vital to include.

People who have high levels of financial wellness and health share these common elements:

  • They are in control of their day-to-day and month-to-month finances and expenses.
  • They have the capacity to absorb an unexpected monetary setback.
  • They are steadily moving toward meeting their financial goals.
  • They have enough flexibility in their budgets to make purchasing decisions that reflect their values.

In other words, financially healthy people have good habits for managing their money. They aren’t living paycheck-to-paycheck, they have an emergency savings fund in addition to long-term savings plans, and they are able to spend their money on items or experiences that will enrich their lives.

The effects of financial stress on workplace performance

While some people might be able to compartmentalize their personal life and work experience, keeping financial stress at home (and work stress at work), most humans aren’t wired that way. Financially stressed employees are nearly five times more likely than non-stressed employees to say that their money concerns are distracting them at work.

Considering that most employees say that finances are their biggest cause of anxiety, what does that mean for your company’s bottom line? A full-time employee could spend almost 20 full working days (156 hours) annually distracted from work due to their financial worries. That translates to $3,922 or more that companies are losing in wages for each stressed-out employee per year.

Furthermore, financially stressed employees are nine times more likely to have antagonistic or troubled relationships with their coworkers, and they’re also twice as likely to be looking for a new job. SecureSave found that 44% of financially stressed employees plan to look for a new job within the next six months!

Building company trust and loyalty when financial stress is rampant

The PwC employee stress survey found that 74% of employees want help with their finances, and that even staff members who are earning $100,000 or more per year are feeling the effects of financial anxiety. 

The survey also offers two key suggestions for employers:

  1. Research and implement new financial wellness benefits that address the immediate money management problems that employees are juggling. This might include personalized financial coaching that can help employees regain control over their day-to-day and month-to-month expenses, or a workplace emergency savings plan that can give them the ability to address a sudden financial crisis without spiraling further into debt.
  2. Explain and promote the existing benefits you’re offering so your staff members understand how those benefits can alleviate financial stress. “We find that when employees learn how a particular benefit can solve a financial need, they’re more likely to use and appreciate it,” note the study authors.

By giving employees what they want — financial support and education — employers send two very clear messages to their workforce: “We hear clearly what you’re saying you need, and we care enough about you and your struggles to try to meet your needs as best we can.”

Connecting the dots between employer support and workplace loyalty

According to Bank of America’s 2023 Workplace Benefits Report, 76% of employees who responded to the survey said that they feel employers are responsible for the financial wellness of their staff members. Interestingly, 96% of employers taking the survey agreed — but only about 40% of employers offer financial wellness programs. The survey also indicated that the 42% of employers offering financial resources have seen measurable reduction in their workforce’s tension levels.

Employees feeling financial pressure are more likely to be looking for a job, more likely to have problematic relationships with their coworkers, and less likely to be engaged at work. By contrast, 80% of employers offering financial wellness support said that their staff members are more satisfied, loyal, engaged, and productive.

The cost of an unengaged and stressed-out employee reaches well beyond a lack of productivity at work. Because these workers are more likely to be job-searching, the threat of higher turnover rates and losing a wealth of historic institutional knowledge is real. Retaining highly experienced employees and reducing the recruitment and training expenses associated with filling an empty role are just two ways that employers can help mitigate or eliminate that cost.

Benefits and programs that enhance financial wellness

Across the board, researchers have similar advice for employers seeking to help staff members with their financial wellness:

  • Meet employees where they are today. If the most pressing needs are immediate money management assistance and emergency savings growth, consider ways to provide budgeting education and a workplace emergency savings program.
  • Only 54% of employers communicate at least once a year about the health benefits and savings programs at their workplaces. Ensure that employees know what health savings support is available to them and how to access it.
  • Saving for retirement continues to be a priority for employees, even while other financial concerns are limiting their ability to do so. Consider matching a certain percentage of retirement savings if you aren’t already, or offering other incentives for participating in long-term savings programs.
  • Communication and education are key components of any employee wellness program. Implement a system that allows you to regularly remind employees of their various financial and health benefits and how to access them, and consider launching ongoing, personalized financial coaching for the workers who want it (most of them say they do!).

Generate loyalty by listening, empathizing, and executing

It’s not just your company: Employees everywhere are concerned about the rising costs of living, and it’s influencing how they’re showing up at work. The best way to show your workers that you care about their well-being beyond their productivity while they’re on the clock is to demonstrate that you hear their concerns, you care about their stress, and you’re taking action to help them become more financially healthy.

Whether your first step is improving education and access around existing benefits (such as health insurance or retirement savings programs), implementing a new financial benefit (such as financial coaching or a workplace emergency savings account), or surveying your workers to better understand what their most immediate needs are, you’ll be able to start cultivating loyalty among your workforce. Compensation is just one component of financial health; you can do so much more to retain your highest-quality workers when you focus on their financial wellness.

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