Studies continue to show that money is a major stressor for many people. When we worry about finances, it can have other ripple effects throughout our lives. It can affect our relationships, and even our work can suffer.
As an employer, it’s beneficial for you to know and understand what your employees may be going through and work to alleviate their stress. They may have questions about earning and saving enough to pay for the lifestyle they want and about saving for retirement.
Many of your employees are struggling with these types of questions, and they may not know where to go for answers. That’s where you can help them by establishing a financial wellness program.
What Is a Financial Wellness Program?
Financial wellness programs are seminars or workshops that educate your employees on some of the broader aspects of finance. These programs offer your employees education, training and support to empower them to make financial decisions more confidently.
These programs focus on various topics like home loans, debt consolidation, and more. But as a retirement plan sponsor, you can also offer guidance to your employees on questions related to your plan, such as:
- Should I participate in my employer’s 401(k) plan?
- How much should I defer each paycheck?
- How should I direct my investments?
- What, if anything, needs to change based on life events (marriage, divorce, the birth of a child, raise or bonus, changing stock market conditions, etc.)?
- Can I meet my basic financial needs while contributing sufficiently to the plan?·
Plan participants are hungrier than ever for guidance and advice surrounding their ever-changing lives. Whether they’re looking for actual advice, to be steered in the right direction, or just given a second opinion, participants seem to want and value that support.
A good financial wellness program offered through your retirement plan can provide invaluable guidance to your employees and, in turn, help decrease financial stress and improve work productivity. If you’re thinking about introducing a financial wellness program in your organization, here are a few tips to help get you started:
1. Understand Your Employees’ Knowledge Base
Your employees are unique. No two are alike, so it stands to reason that not everyone will have the same understanding of their financial lives. Consider everyone’s level of knowledge when developing your financial wellness program, and work to provide solutions that will benefit all employees.
Then, once you’ve established a base level, you can start to build programs that empower your employees to make the right financial decisions for their situation.
2. Address Individual Areas of Concerns
Once you establish a knowledge base, you can plan for everyone’s current financial needs. For example, some of your employees may need to pay for a child’s tuition. Maybe some are looking after a sick parent. Find ways to address your employees’ current needs and provide workable solutions. Then, set up opportunities for employees to connect with specialists that can assist them with their unique needs.
Once you address their needs, you can focus on helping your employees save for retirement. By helping your employees improve their financial decisions now, you will hopefully help them more efficiently save for retirement later.
3. Motivate and Encourage Employees
These types of programs are about empowering your employees to take control of their own financial lives. Make it clear to them that the purpose of these financial education programs is to be a source of information and guidance. In the end, they are the ones who must take action to improve their situations.
However, you can provide helpful nudges along the way. Maybe set up an incentive program that rewards them for participating in the program and taking an initiative. Ensure that they know you are trying to help alleviate their financial stress.
Understanding your objective will help your team appreciate the support they are getting from you. And in turn, their appreciation may lead to a greater sense of happiness in the workplace, which could improve job performance.
Building Out Your Program
A well-structured financial wellness program can help workers feel less stressed, help them improve and meet their savings targets, and give them more confidence in dealing with life’s financial situations. In turn, this can produce physically and mentally healthier employees, happier about their financial well-being, and more focused and productive in their jobs.
Speak to your Wealth Enhancement Group advisor to see how we can help you create a financial wellness program for your 401(k) plan and employees.
