When the Society for Human Resource Management recently asked the question: ‘Is 2017 the year of employee financial wellness programs?’, the answer was a resounding “yes”. Employers are in a position to relieve stress and raise the productivity of their employees by giving them the support and tools they need. Recognition of this is gaining momentum in the UK and the US and it’s time that forward-thinking Australian employers got on board.
If you want to unlock potential productivity gains by helping your employees to reduce their financial stress, then you need to approach the issue in a meaningful and targeted way. This starts with a clear idea of who your financial wellness program will help. While any employer who engages with their employees on matters of welfare should be applauded, when it comes to making a real difference, this is where so many fall short.
Financial wellness with the best intentions
Many employers give their employees access to advice on superannuation, insurance and even investment. And given the competitive nature of these markets, these product providers are of course more than happy to help. While this is offered with the best intentions, this form of financial wellness program is extremely limited in its scope as it completely overlooks the more common concerns of financially stressed employees. By only helping those workers whose main concern is superannuation or investment employers will simply scratch the surface of the issue and will be unlikely to unlock the full extent of potential productivity gains.
This form of financial wellness program is extremely limited in its scope as it completely overlooks the more common concerns of financially stressed employees.
The real financial needs of your employees
It’s true that financial stress occurs across all salary levels and isn’t confined to a particular age group. However, there are key demographics who have more immediate concerns than fine-tuning an investment portfolio. Consider the needs of a young employee who is struggling to repay a series of payday loans. Education on self-managed superannuation funds is probably the last thing that will engage them or help them deal with their finance-related stress.
Similarly, consider a person who is on the treadmill of high-interest payments on a maxed-out credit card. They should be paying attention to their superannuation and insurance situation, we all should. But how likely is it that a lunchtime investment seminar will help them get on top of their debt?
Mortgage debt levels are high, interest rates are low and there has been little growth of wages recently. This sets the scene for acute financial stress should interest rates rise. Employers who can offer tools to guide their employees through such issues are the ones who will gain employee loyalty and mitigate the productivity losses caused by employees being distracted by their financial stresses.
How employers can help
The choice for employers is clear. Are you satisfied scratching the surface, addressing superannuation, insurance and investment education and calling this your financial wellness program? Or, do you want to tackle the very real financial stresses weighing on employees cornered by high-interest debt? What those employees need is targeted guidance through their immediate issues and then a helping hand to make sound financial decisions once they are on top of their debt. Any employer who does this, while navigating all of the regulatory pitfalls, deserves all the business benefits of being a true champion of financial wellness.
Bees with Honey offers free resources that you can share with employees to help them tackle financial stress in an appropriate and meaningful way.