10 Jun Justify Your Financial Wellbeing Investments With Our Cheat Sheet
Financial wellness might be the hottest HR trend of 2019. But does investing in employee financial wellbeing really pay off?
As an HR professional, you need to know two things about benefits investments. First, you need to know why investing in specific benefits pays off for employees. Second, you need to know how those investments boost the company’s bottom line. CFOs often ask for proof of ROI, and that can be difficult to justify.
We analyzed all the research and discovered six ways financial wellbeing programs literally pay off:
Attracting top talent
Three out of four employees feel financial wellness benefits are important, according to a recent study. Therefore, offering these benefits is crucial for firms hoping to lure top-tier talent, especially in today’s cutthroat job market.
It makes sense that job seekers crave financial assistance, as finances are the biggest source of stress for employees. As many as 58% feel a pinch from money concerns, according to the study; work and family caused less angst. Your employees (or candidates) likely have some money-induced stressors. These could include student debt, buying a home or saving for a child’s education. That means offering a benefit around financial wellbeing will go a long way.
Employees who feel financially secure find it easier to focus on their work. By offering financial wellness, companies see 68% greater employee engagement. Similarly, 57% of employees credit getting a handle on their personal finances with increased productivity at work.
Worrying about money is distracting…and unhealthy. Financial stress can trigger a raft of serious health issues, from migraines to depression. That’s not only bad for individual employees; it’s also bad for the company. Mercer estimates that employee financial stress costs the average firm 13 hours of productivity per month — almost two full workdays.
Increasing employee retention
If you can’t give your employees a raise, the next best thing may be investing in their financial wellbeing. Over half of employees say they’d be more likely to stay at a job that offered financial wellness benefits. Loyalty soars by 70% and satisfaction surges by 78% at companies investing in this area.
These satisfaction and loyalty numbers quickly turn into dollars. Skilled workers are a premium in today’s economy. High turnover saddles employers with the cost of continually recruiting and training new employees. By boosting employee satisfaction and loyalty through financial wellness programs, firms can help reduce turnover and the associated costs.
Lowering healthcare costs
Every year, healthcare expenses go up by $413 for each employee who reports high stress from finances. By helping workers manage these issues, financial wellness programs can greatly reduce this stress.
Encouraging use of benefits
Firms that focus on employee financial wellbeing see increased uptake and usage of FSA and HSA plans. In turn, HR teams benefit, as impressive usage statistics clearly prove the value on investment to senior leaders.
Along with increased use of company benefits come other advantages. Insurance users get more checkups, for example. Along the same lines, those with dedicated HSA and FSA accounts are less likely to delay getting the care they need. That means they’ll use fewer sick days. (Except, oddly, the day after company happy hours).
Getting employees to retire on time
Here’s a major way for your company to save money. Even a one-year increase in the average retirement age leads to incremental annual costs of 1-1.5%. So, assume 3,000 employees and workforce costs of $200 million. You could lose $3 million. Furthermore, one delayed retirement could cost $50,000. That’s the same amount it might cost to onboard a new hire.
How can you help employees retire on time?
By taking a holistic approach to addressing their financial health, you’ll put them on track to retire on time. Additionally, you’ll help them save, whether they’re budgeting for a home or setting aside emergency funds. This approach can come in a variety of forms. You could educate employees on financial wellness, for instance. Alternatively, you could offer specific retirement plans with features designed to promote timely retirement.
The evidence is clear. Investing in financial wellbeing brings ample returns. Individuals who feel financially supported can focus more on their jobs. They’ll stay longer, as a result.
Furthermore, financial wellness is going mainstream. Three-quarters of firms predict it’ll be a standard benefit within two years. Put your company ahead of the crowd!