Are you doubtful to offer financial education as part of your employee benefits?
You aren’t alone. Many of the employers and HR professionals I talk to are aware of the benefits of providing personal finance support to their workers, but they are also mindful of the challenges .A study done by top financial firm showed personal finances as the top source of employee stress. Fast forward to a corona virus-riddled 2020, the study found employees are now more likely to believe their employers have a responsibility to address their financial well-being.
So, despite the rise in popularity of workplace financial wellness and available resources, why do employers still struggle with successfully implementing a comprehensive program? We’ve highlighted the top six challenges employers are facing to effectively implement the same.
- Stressed resources. HR teams wear many hats and every hour of the day counts. There’s a mistaken belief that implementing and executing a financial wellness program will take a lot of time. A good program will be turnkey should shrink the workload of HR, and does not need difficult integrations or IT resources to be operational.
- Lack of support. Organization economic decision-makers are not brought into early conversations about the need for employee access to objective financial guidance and education.
- Misunderstandings of ROI. A financial wellness program is a cost saver, not an added expense. Organizations will often not explore financial wellness programs due to preconceived thinking of it being too expensive.
- Miscalculation on costs of financial stress. Employers are already paying a high cost for employee financial stress, but do not identify it because a large portion shows up indirectly as absenteeism, presenteeism, health care, deferred retirement, and retention expenses.
- No dedicated financial wellness budget or flexibility to repurpose budget from other areas. Financial wellness can be paid for via retirement plan assets, wellness funds, or communication budgets, not just from general funds.
- Mindset: There is a belief that financial wellness programs are a perk instead of a must-have, core employee benefit. Some organizations view personal finances as beyond the scope of employer responsibility, without understanding the effects of financial stress on company culture and bottom-line.
HR professionals can Identify from the above 6 challenges and help in removing them to help the organization grow in its path to wellness. After identifying your precise blockers, formulate a plan focused on combating one hurdle at a time. Focusing on one at a time will enable HR teams to move the process forward and think creatively about finding funding opportunities.
What can HR do to incorporate financial wellness into a broader wellbeing strategy? We’ve broken it down into 4 actionable phases to help employers get started:
S – Start
P – Perform
E – Evaluate
C – Consider
Start: Start with the commitment to a comprehensive wellness plan that includes physical, mental, and financial health as core components of employee wellness.
Perform: Perform a gap analysis. This includes finding the area which is lacking in overall personal financial wellness of the employee.
Evaluate: Evaluate your current options by talking to a personal financial advisor. Structure a plan to communicate these benefits to your employees. This will begin to bridge the gaps in your overall wellness program.
Example: Retirement review – This encourage employees to review their retirement plans with financial wellness provider. This is particularly effective for your employees age 40+
Consider any additional gaps in the program.
- Implement a financial coaching/counseling solution
- Provide incentives for attendance to uncomplicated financial education courses.
- Consider providing short-term loans and/or payroll advances as a voluntary benefit to aid employees through the pandemic recovery
Ultimately, improving employee financial health is a long-term effort. There is no ‘quick fix’. A financial planner can help HR professional in planning this.
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