Economists are describing current labor challenges like the Great Resignation. As a result, more employees are seeking alternatives, and finding and retaining talent is an issue for many employers.
Offering a better benefits package is a strong strategy for attracting talent and increasing job satisfaction. Introducing a financial wellness program to your current benefits package can help you stand out and offer more value to your employees.
Read on to learn more about the benefits of offering an employee financial wellness program and how Thrive can empower employees to make better financial decisions.
What does financial wellness mean? Financial wellness includes a person’s ability to take control of their expenses, make plans for their future, and implement the right financial strategies to achieve their goals.
An employee financial wellness program is a perk that typically includes educational material and financial education to help employees navigate their finances and plan for the future.
The great thing about financial wellness programs is that each employee receives personalized attention and education. This benefit unlocks value by helping employees adopt financial strategies for their current life stage and goals, whether they want to save up for homeownership or plan for retirement.
In 2021, the percentage of employers offering a financial wellness program increased to 46%, compared to 40% in 2020. This number reflects that employers are focusing on building holistic benefits packages that include perks like physical and mental wellness programs.
Employers need to rethink their benefits package.
An estimated 44% of workers are currently looking for a new position, and attracting and retaining talent can be challenging. Offering a more comprehensive range of benefits can make employees feel valued.
Workers are also facing several financial challenges, including stagnating wages, inflation rates as high as 8.6%, a housing shortage, and crushing levels of student loan debt. As a result, it’s more important than ever to take a strategic approach to managing assets and building a financially-sound future.
Financial wellness programs can make a difference by providing employees with the information and tools they need to improve their financial well-being and deal with these challenges.
Employee financial wellness is essential at the organizational level because it can reduce stress and anxiety. Studies show that 79% of employees experience work-related stress, an issue that often affects their engagement and performance. With a financial wellness plan in place, you can help alleviate stress in their personal life to lessen the problem.
Plus, offering a financial wellness program sends a strong message. It shows that you genuinely care about employees and want them to succeed. As a result, it can contribute to positive company culture and increase retention.
Lastly, a financial wellness survey conducted by the OECD found that only 16% of adults assessed their financial literacy level as high. However, most adults know that they need to improve their financial literacy and will see the value of a financial wellness program when reviewing the benefits package you offer.
If you’re unsure how much value a financial wellness program would create for your organization, you can assess interest by conducting an employee wellness survey. The answers can give you an idea of how confident employees feel about their ability to manage their finances and whether they think they could benefit from a financial wellness perk.
Thrive: How it Works
Thrive makes financial wellness accessible to everyone. This program delivers information clearly and concisely and adapts to the unique needs of each employee. Here’s how it works.
Clear, concise and adaptable!
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The purpose of the welcome packet is to give an overview of the program. The welcome packet contains enough information to show the benefits of Thrive without overwhelming the recipient.
Employees can familiarize themselves with the different steps of the plan and start thinking about how this benefit will positively impact their lives. The welcome packet also shows the program’s value and reinforces the decision to enroll.
The discovery meeting is an opportunity to get together and learn more about how Thrive works and why financial wellness matters.
A one-on-one meeting can feel more engaging than reading material, and employees will get the opportunity to ask questions about the program. The purpose of this initial meeting is to educate employees about Thrive and encourage them to play an active role in this process.
The discovery meeting is an exciting step. If employees aren’t on board yet with this program, the meeting will typically help them understand the main financial wellness benefits they will get out of the program.
It can also help employees start thinking about their current financial situation and the areas they want to focus on improving.
Communicating about the benefits of a financial wellness program or any other perk you offer employees is vital because it can increase adoption and set clear expectations.
Next, employees will share information about their current financial situations to get a personalized financial profile and wellness score.
The financial profile takes into consideration their current life stage, their assets, their debt level, and their financial goals. In addition, their wellness score considers several factors, such as their debt-to-income ratio, spending habits, how much they’re earning compared to their peers, and more.
The financial profile and wellness score are helpful tools that create a financial snapshot of an employee’s current situation. It gives them an idea of how they compare to their peers, and it can highlight some areas that need improvements, such as high debt levels or insufficient retirement savings.
A financial counselor will review each employee’s financial profile and wellness score. They will also consider each person’s financial goals.
They will use this information to create a comprehensive financial wellness plan with a clear roadmap for the future. A financial wellness plan can include the following elements:
- Weekly or monthly budgeting for the household.
- Savings goals for short and long-term projects.
- Steps to pay off debt, including consumer debt or student loans.
- Strategies to build assets for retirement.
Each plan is unique. Wellness program examples include:
- Plans that will help an employee save up enough to retire early and travel.
- Step-by-step plans to achieve home ownership and lay strong foundations to start a family.
- Management strategies for those with high levels of student debt.
- Measures to build up emergency savings and protect a household from financial crises.
- Strategies to build wealth and generate enough passive income to retire comfortably.
When creating financial wellness plans, financial counselors set realistic goals aligned with each employee’s priorities and break down these goals into smaller steps. Each employee will receive a personalized plan with clear weekly or monthly goals that will take them closer to the next financial milestone.
Financial counselors will then deliver the plan. Employees will have the opportunity to review the plan and ask questions. The counselors can make a few adjustments to the plan based on feedback from each employee after presenting them with a few financial wellness ideas.
Delivering the financial plan is a concrete step toward building a better financial future. Employees can use their financial plan as a roadmap to navigate their financial situation. And because each plan includes smaller weekly or monthly goals, putting the plan into action doesn’t feel overwhelming.
Employees aren’t alone when implementing their financial wellness plan. They will get to meet with a financial counselor once every quarter.
These quarterly meetings are an opportunity to review what the employee has achieved over the last three months and ensure they are on the right track. In addition, the financial counselor can recommend some strategies to catch up or adjust the plan if the employee struggles to meet their quarterly goals.
Employees can also ask questions during these meetings. For example, they can get a better idea of the next stage of their personalized plan, learn more about financial products they’re considering, or assess the feasibility of a new financial project they’ve been considering.
Meeting regularly with a professional encourages employees to keep track of their finances and actively manage their spending, assets, and debt levels. It can support better financial habits, and employees also feel supported since they can have a professional review their finances regularly.
With Thrive, employees can work with a professional to adjust their financial goals as needed. Their financial counselor will discuss how their goals change during quarterly meetings and make necessary changes to their financial wellness plan.
Financial goals can change for several reasons. Employees might decide to increase their savings goals after getting a raise.
Personal circumstances can also change. For instance, becoming a parent usually means employees have to plan for higher spending levels and adjust their financial goals to start saving for college.
Financial objectives also evolve as people go through different life stages. For example, young adults often need to focus on getting out of debt, building their credit score, and taking the first steps toward home ownership.
Employees in their 40s and 50s will need help maximizing their earning potential and building assets. Then, as employees get closer to retirement, they can work with a financial counselor to prepare for this next step.
Thrive is a flexible program that evolves as recipients’ needs change. Therefore, financial counselors will make as many updates as needed to offer value to employees.
Thrive is more than a financial wellness plan and quarterly meetings. Employees will have access to additional resources to manage their finances.
In 2022, a little over 20% of high school students will count a personal finance course as part of their classes. While this percentage has been increasing, most young adults are still entering the job market with limited knowledge of personal finance topics.
There are also knowledge gaps among older generations, especially with Baby Boomers, who are less likely to turn to the internet to learn about these topics.
Thrive can bridge this knowledge gap through engaging material. Learning about budgeting, investing, saving, and other personal finance topics becomes accessible to everyone. The material is clear and concise so that employees can learn something new whenever they have a few minutes to dedicate to their financial education.
Thrive also includes engaging tools designed to help employees take control of their finances. These tools empower recipients to make decisions and implement the strategies recommended by their financial counselor.
Making these tools available to employees will help them adopt better financial habits and play a more active role in planning for their future.
Thrive sets clear goals with the development of a personalized financial wellness plan. Recipients can then use different tools to track their results.
Having access to measurable results makes financial wellness feel more concrete. It also provides employees and financial counselors with valuable data they can use to adjust the financial wellness plan as needed. It’s also easier to set new financial goals when concrete data supports this decision.
Plus, keeping track of their results can help motivate recipients to stick to their new financial habits. It also makes the program more transparent and empowers employees to take responsibility for their finances.
Thrive wants to help your organization get the most out of offering financial wellness programs as a benefit.
When you implement Thrive, key employees will receive training to understand better how the program works and how to communicate about this perk.
Training ensures that HR employees and other decision-makers can explain the many advantages of the program and can answer questions. Knowing how the program works can improve the adoption rate for this perk. It can also help establish clear expectations, improving the satisfaction rate among employees who use Thrive.
Employers can make a difference by providing employees with educational material, advice, and other resources designed to improve financial wellness. There is often a knowledge gap in financial planning, and employers can help empower recipients with the right tools and information.
There are several financial wellness benefits for employees:
- First, employees can feel more in control and start making concrete plans for the future with the help of a professional. It’s something that can open new doors for them.
- Recipients can get more out of their paychecks by implementing strategies to maximize their earnings and build assets.
- Life can be more fulfilling as employees work toward achieving goals like founding a family, buying a home, or preparing for retirement. In addition, it can result in less stress at work and help employees feel more engaged.
- Financial wellness can provide employees with peace of mind. One in three employees doesn’t have enough money saved up to retire. Making a concrete retirement plan will make recipients feel more optimistic about the future.
- Financial wellness programs can help employees tackle student debt, an issue for more than 43 million borrowers who own $1.7 trillion collectively. In addition, debt is a significant issue for many young adults who have to delay milestones like buying a home or having children.
What is financial wellness? How do financial wellness programs create value for employees? Read on to learn more about this perk.
These two concepts are slightly different, even though there is a strong connection between the two. Financial literacy refers to a person’s knowledge and understanding of budgeting, investing, financial planning, and other topics.
Financial wellness refers to the strategies in place to achieve specific financial goals. A person needs to possess financial literacy to choose these strategies.
From an employer’s perspective, offering a financial wellness program has many benefits. First, it’s an additional perk that can make a job offer more appealing.
It’s also a benefit that can help employees grow and achieve their personal goals, which often results in a workforce with less stress and higher satisfaction and engagement levels. In addition, financial wellness programs can improve employee retention since employees will have strategies to maximize their earnings and build assets based on their current income.
What is a wellness program? A financial wellness program is a perk you can offer employees to help them take control of their finances and make plans for the future.
With Thrive, employees can access engaging resources and a personalized financial plan. In addition, working with a financial counsellor to identify the right strategies to tackle financial issues unique to each recipient and achieve the goals they care about adds value to the benefits package you offer.
If you’re ready to upgrade your benefits package or want to learn more about Thrive and financial wellness, contact us at Conscious Impact Financial Planning.