The Importance of Financial Wellness for Teams in the Workplace
Financial Wellness for Teams
Have you ever wondered how financial stress impacts your workplace? Or you've felt the weight of financial worries affecting your productivity and overall well-being. Financial wellness is more than just a buzzword—it's a crucial aspect of employee satisfaction and performance. In this post, I'll dive into the insights I've gained as a certified financial therapist on the importance of financial wellness in the workplace and its benefits. I'll also offer a quick set of questions to help you assess whether your workplace offers effective employee financial wellness programs by thinking outside of the typical benefits provided, with emergency fund support, living wages, and more.
The Reality of Financial Stress
In my work as a financial therapist, I often get a sneak peek into themes affecting people, and one recurring theme has been how employees feel let down by their workplaces' financial wellness offerings. Many people feel like their employers are neglecting their financial well-being. Financial stress levels are soaring, with many workers feeling trapped by the high cost of living and struggling to meet financial milestones that previous generations were able to meet. When employees seek help from their employers, they're often handed generic pamphlets on budgeting or saving—superficial solutions that fail to address the root causes of financial anxiety and stress.
How Does Financial Wellness Affect Health?
There is an undeniable link between mental health and money. Chronic financial stress can lead to increased anxiety, depression, and even physical health issues like poor sleep, high blood pressure, and heart disease. Research has also found a bidirectional (or two-way) relationship between debt and clinical depression.
In other words, people with clinical depression are more likely to have debt, and people with debt are more likely to meet the criteria for clinical depression. If financial stress negatively affects health, it's safe to say that investing in financial wellness is good for our physical, mental, and emotional well-being, too.
Why Is Financial Wellness Important?
If you're an employer reading this and wondering if your staff is financially stressed, there's a good chance the answer is "yes." According to a 2024 survey by GOBankingRates, nearly half of Americans have less than $500 in their savings (https://finance.yahoo.com/news/nearly-half-less-500-savings-170050488.html).
Financial wellness is important because it directly impacts employees' quality of life and job satisfaction. By investing in financial wellness programs, employers demonstrate their commitment to the well-being of their workforce, leading to higher retention rates, improved morale, and increased productivity.
Benefits of Financial Wellness
The benefits of prioritizing financial wellness in the workplace are extensive. Employees who feel financially secure are more engaged, focused, and motivated. They experience reduced stress levels and are less likely to seek employment elsewhere.
A Brightplan survey of employee well-being found remarkable numbers about what they want their employees to provide for them. The Brightplan survey found that 88% of employees expect employers to offer them tools for investing, 87% want access to financial education, and 84% want access to a financial professional, such as a planner, counselor, or therapist. So the overwhelming majority of people are saying, not only do I want a paycheck, but I also want benefits that help demonstrate to me that my employer cares about my financial well-being.
Employee Financial Wellness Programs
Many employers confidently tell me that they already offer employee financial wellness programs. When I inquire about what that means, they usually say things like, "We have a 401k plan," "We had somebody talk about saving up for a mortgage during financial literacy week," or even, "We had a financial advisor available in the conference room that people could go visit as needed."
These things aren't inherently bad, but if these tactical one-off "how-tos" are all you're doing, you're not creating a culture where your employees feel safe talking about money, asking for money, and also getting the benefits of their financial well-being so they can show up fully in their role.
Instead of having somebody hang out in your conference room and talk about life insurance or retirement, here are some perfect questions to effectively assess whether you are providing comprehensive financial wellness benefits:
Are we Paying a Living Wage? Ensure employees earn a wage that meets their basic needs and provides financial stability. The minimum wage is a government-set floor for the lowest amount an employer can legally pay staff. However, the minimum wage is separate from any meaningful cost-of-living metric. The "Living Wage" is the hourly rate that a full-time worker needs to earn to cover the costs of their family's basic needs where they live. Make sure that whatever you're paying is at least as much as the living wage.
Do we Support Emergency Funds? To help your employees move out of the paycheck-to-paycheck cycle, provide education on the importance of an emergency fund. $500 is a good starting point, and it helps them work toward the research-backed 1-month of expenses for a more robust safety net. (Psst, start here by sharing this post and video about emergency funds). Even better, incentivize emergency savings by offering bonuses or automatic savings account enrollment.
Are We Helping Employees Invest in Retirement? Provide retirement contributions to a tax-advantaged plan such as a 401k or 403b. While incentivizing employees to put their own money into retirement is great, remember that many employees might not be at a place where they can contribute yet. Try something like a small amount you fund for everyone, and then incentivize again with a match. For example, everyone gets $100 per month in a retirement account and get 3% matching if they contribute 3% of their paycheck to their retirement plan.
Do We Embracing Financial Therapy? Offer access to financial therapists who can address emotional and psychological barriers to financial well-being. You can look into including financial therapists as a part of your EAP benefits or hire a financial therapist to provide a 1-time workshop or series of educational and informational trainings for your staff.
Are We Creating A Culture of Normalizing Financial Conversations? As a facilitator and curriculum creator for the University of Michigan's Financial Empowerment Initiative, I believe that talking about money is a net positive. It deepens relationships, provides validation, and creates connections between people. Try including FUN money goal check-ins at your next team retreat, challenging each other to a no-spend week, and including money conversations at annual performance reviews.
Promoting financial wellness among teams fosters a culture of support and empowerment. Encourage open discussions about financial goals and challenges and provide resources such as workshops and educational materials to enhance financial literacy.
Financial Wellness at Work
Integrating financial wellness into workplace culture is key. Clear financial literacy and benefits communication, ongoing support, and a proactive approach to holistic financial education that includes addressing the emotional side of money can create a positive and sustainable environment where employees thrive.
What Now?
If you're an employee looking to integrate holistic financial wellness in the workplace, reach out! As a financial therapist with experience facilitating engaging workshops, I'd love to chat about how to help your unique workplace integrate financial well-being at work.
Not sure which financial wellness topic your team needs? Good news! I’ve got a free quiz to help you decide on the financial wellness topic that will best support your team right here!