3 employee financial wellness strategies every HR leader should know

When you work in HR, maximizing employee performance and productivity is a core part of your job. Ensuring employees are (or have the means to become) healthy and happy at home is vital to maintaining their best level of effort and focus at work. Benefits and programs that support employee financial health are becoming a top priority for HR teams.

Food, housing, healthcare, and education have gotten significantly more expensive in the last few years, and all other living expenses are following suit. In fact, studies show that 80% of US employees are feeling at least some financial stress, but less than 30% of employers offer financial wellness programs. As inflation and uncertainty rise, getting a handle on employee financial health now is a prudent way to keep employees calm and focused on the road ahead.

But there’s more to maximizing employee financial wellness than net pay — and the solution is often more complex than offering a raise. Studies show that an alarmingly low number of employees demonstrate financial literacy, suggesting that education, resources, and benefits can make a huge difference in the lives of your employees, especially when they’re targeted towards life's most meaningful moments.

Understanding employee financial wellness

With so many financial wellness programs to choose from and so much noise in the market, choosing the right financial wellness benefits and programs starts with understanding financial well being and the different ways it impacts your employees’ lives.

Financial wellness defined

Financial wellness is more than just a genre of books at an airport — it’s the way an individual manages their personal finances relative to their lifestyle. Financial wellness looks like positive cash flow, bills paid on time, savings and retirement plans, and financial flexibility.

A related yet separate term is financial confidence, which describes how well an individual feels about their ability to understand and make sound decisions with regard to their personal finances. Financial confidence can look different for everyone, so long as they feel like they have the flexibility and freedom to pursue the life they want.

When someone lacks financial well-being, they may be failing to pay their bills on time, living beyond their means, or struggling to pay for necessities like food, housing, or healthcare. And when an employee experiences financial stress, they may struggle to focus at work, take more time off than their peers to handle financial issues, or lose productivity due to stress. Rolling out an employee financial well-being program can help your employees:

• Stay productive and reduce absenteeism
• Improve productivity and output
• Increase loyalty and improve company culture

Financial wellness, mental health, and productivity

Poor mental health and financial stress often go hand in hand — it’s hard to stay on top of money when your mental health is struggling, and it’s harder to manage your mental health when finances are in the red. A recent survey by Manulife found that “when employees are financially unwell, they are far less likely to be engaged and productive in the workplace, which can directly impact business success.”

But productivity isn’t only affected by extreme cases, and financial stress doesn’t always look like a Past Due stamp on an envelope. Money is intimately connected to an individual’s autonomy — a tighter budget, a smaller pantry, or even the perception that times will be tougher, can impact focus and productivity.

In the long run, extreme financial worries can lead to poor mental health outcomes. A Pew Research Center study found that worries about personal health and financial security are related to higher levels of psychological distress. Prolonged states of financial stress can lead to poor physical health as well, as employees may opt to skip doctor's appointments, consume lower quality foods, or engage in other unhealthy habits — all of which equate to higher healthcare costs for your company, and lower employee productivity.

Trends in financial wellness services and benefits

As employee financial wellness programs and financial wellness tools become more popular, a few notable trends have emerged.

Coaching, counseling, and education

One approach is to work with vendors that can provide personalized educational resources and coaching to help your employees plan and pursue their financial goals and increase their financial confidence, including homeownership and retirement.

Resources for building and raising families

Some companies are providing resources that help employees navigate building and raising families, including reimbursements and debit cards for things like fertility treatments, family planning, and childcare. 

Personalized financial planning

Finally, personalized resources, in addition to employee-sponsored retirement or savings plans, can help employees plan for their retirement goals. Many 401k providers and health plans offer planning tools to assist employees in making the right choices and contributions for their goals.

Three financial wellness benefits strategies that really work

Financial wellness isn’t a simple equation: you can’t just add water, sun, and patience. There are several strategies you can take to ensure employees are utilizing benefits that meaningfully reduce financial stress.

Build a support network around big financial moments

While true financial wellness is a daily commitment, employees often need help with life's major milestones, including:

• Student loan repayment
• Homeownership
• Family building
• Childcare
• Major healthcare expenditures
• Retirement

When employees experience large financial burdens like buying a home, paying off student loans, or an unexpected medical event, you can offer tailored programs that help with debt management, student loan assistance, and financial literacy. Some companies are rolling out debt management programs that help employees refinance and consolidate debt, while others are bringing on third-party consultants to host seminars and offer coaching sessions.

Similarly, family building and childcare are deeply emotional processes that can take up significant amounts of time, effort, and money from your employees. A single round of IVF can cost upwards of $15,000, and childcare is costing the average American nearly a quarter of their monthly income. Consider creating a benefits experience that can address these milestones with personalized and tailored solutions. For example, Maven Wallet helps your employees access reimbursement money quickly and securely, reducing administrative overhead and offering peace of mind. 

Building a financial wellness program that coalesces around the major milestones ensure a multigenerational workforce has support that’s relevant and personalized to their needs. To put it simply, Gen Z and millennials need help with loans and family building, while Gen X and Boomers are more focused on major healthcare expenses and retirement. 

Consider the whole person — and their family

Another underlooked aspect of financial well being is the many ways a person’s background, education, and lived experience informs and impacts their financial practices. This is especially relevant for companies with large populations of hourly workers in low-wage positions, like factories, kitchens, or customer service. The same can be said of the many ways in which your employees navigate family building, child rearing, and homeownership.

Employees who live in multigenerational homes, for example, have different financial needs and calculations. Likewise, employees who plan to build families with assisted reproduction technology require significantly more money and time upfront to plan and conceive. 

When designing your financial wellness program, make sure you’re taking into account your unique employee population and the visible and invisible challenges they may face. If you’re working with third-party consultants, look for those who can identify or relate to the lived experiences of your employees, and can understand when and how they experience financial stress. Similarly look to work with benefits providers who can accommodate the needs of diverse employees as well as members of the LGBTQIA+ community. 

Prioritize resources that are virtual and on-demand

If you’ve ever run a benefits seminar, you know how hard it is to capture an employee's attention with a powerpoint about 401k plans, 529 accounts, or the difference between an HMO and a PPO. Often, they don’t retain this information the first go around, and only seek it out when they need it urgently. The same can be said for financial wellness resources.

Prioritize building a financial wellness program that’s accessible on-demand, so employees don’t have to wait for next year’s benefits fair to learn why FICO scores are important. Maven offers on-demand content and classes so employees can get their questions answered whenever they need it, in addition to being able to book virtual appointments with coaches and experts. Virtual experiences also ensure employees can find answers on their own time and at their leisure.

Kickstart your employees’ financial wellness with Maven

Building and raising families touches the vast majority of your employees. 2/5ths of US households have at least one child under the age of 18 — it stands to reason that more have older children, or are planning to have children in the near future.

Maven is your go-to resource for all things family: our solutions give your employees 24/7 access to personalized care for all of their family building, maternity, and parenting needs. They can access thousands of hours of content and classes, in addition to booking appointments with experts like fertility financial experts and adoption coaches. Maven also helps your HR team administer benefits like fertility reimbursements, boosting utilization, ensuring compliance, and removing the burden from your staff. To find out how Maven can help your employees maximize financial wellness for their families, contact our team today.