How To: Create A Financial Wellness Program
Financial wellness, simply put, is the ability to have a healthy financial life - speaking about an individual, you could also call it one’s financial health. Though it’s similar to financial literacy, the two concepts are not the same; financial literacy denotes a person’s level of financial education and skills, while financial wellness is more of a snapshot of someone’s current financial state. This would include their level of financial literacy, their current bank balance, how much they have in savings, their ability to manage their debt and how much they owe, their credit rating, their confidence when it comes to money management and so on.
Considering that definition, it should be clear as to why financial wellness is so important. Even those with a high level of financial literacy won’t always be able to manage a major financial emergency or be able to grow and protect their wealth wisely on their own. So, if you’re an employer looking to offer your employees a benefits program that will genuinely help improve their financial situations, you need to be thinking about providing a holistic approach to financial support in the form of a financial wellness program. A financial wellness program is a benefits plan designed to help employees reduce financial stress and manage their money as effectively as possible. The ultimate goal of such a program is to boost an employee’s level of financial wellness and help them build and protect their wealth with long-term stability in mind.
As we’ve mentioned in numerous Workplace Wellness articles, financial stress follows employees into the workplace. Financial stress is generally the largest single cause of stress for employees, above health issues and personal issues, and is pervasive in our country - 1 in 3 employees admit that they’re less productive at work due to their financial stress. This translates to a great deal of lost wages and lost time where your employees aren’t focused on your organization’s goals. On the flip side, research also shows that if employees are on track to meet their financial goals, they’re more likely to be satisfied with their job, more committed to their organization’s goals and more likely to still be working for their current organization in 12 months than those who aren’t (on top of being more happy, productive and engaged). As such, offering your employees a financial wellness program will help your business boost it’s employee engagement and retention rates, leading to a positive effect on your business’s bottom line in the long-run.
It should be stated that like all other high-level plans, you’ll need some data to work off of before your create your financial wellness program. By that, we mean that you can’t accurately predict your employees’ financial needs or what their long-term goals are without asking them. Are they focused on saving for retirement, or are they more interested in growing their wealth through investments in the near future?Consider creating a survey for employees to fill out, or ask them in an open discussion what would suit them best. Their answers will help you determine what goals you’re trying to meet by creating your plan, and allow you to focus your resources where they’ll be most effective.
Once you’ve got an idea of what the greatest needs are, you can then consider what kind of program components will help achieve those goals. A great financial wellness program is a multi-pronged plan that works both reactively and proactively towards resolving your employees’ financial issues. As such, you’ll need to consider all the different ways your employees might need more financial help, beyond just “having more money”. There are a number of components you could add, and we’ve outlined a few of the most popular choices.
Monetary Benefits
Offering your team monetary benefits is the most expensive element of offering a financial wellness program, if you choose to do so, but is arguably the most important of all. When we say “monetary benefits”, what we mean is any benefit that offsets the cost of an employee’s life due to direct, monetary contributions made by your organization. This could be done in a number of ways, such as providing health insurance for employees, matching part of what they contribute to their registered saving accounts, or offering them some form of liquid cash benefits (like a match-based saving plan). Any of these options would offer them either an increased level of income overall, or help to greatly reduce what they would otherwise be forced to spend on essential services. Arguably, you could include a number of other perks in this category, such as gas money for those who must commute to work, reimbursement for food and so on. However, these types of smaller benefits are going to be much less effective in reducing an employee’s financial stress levels (and in turn, less effective in boosting employee engagement and retention levels for you business) than larger considerations like savings, retirement and health care.
Given the year most Canadians just had, benefits that offer an employee a direct boost to their savings are what most people really need right now. Countless people faced rough, uncertain economic conditions for most of 2020 due to the pandemic, and even many of those who were diligent savers pre-pandemic have been forced to deplete what money they had put away to stay on top of their expenses. Though benefits that contribute to goals like one’s retirement savings are still important, most people are more focused on managing their short- and medium-term financial needs first right now. As such, a benefit that will help your employees re-build their emergency funds is something that will truly help stabilize them, and provide them with the level footing they need to turn their focus back to their long-term goals. If you want to know more about how QUBER can offer Canadian employers a customized match-based saving program, click here.
Financial Education
Many Canadians simply don’t have the information they need manage their money effectively. Despite it’s importance, financial literacy is only just now becoming a topic of discussion in grade school, and even then, it’s still barely touched upon in curriculums across the country. For people that grew up in households that didn’t openly discuss responsible money management, they may have never been exposed to an example of essential skills such as how to budget, file taxes or how to reduce non-essential spending.
Beyond that, financial education is critical in creating opportunities for your employees to have long-term success with their money management routine. Providing monetary benefits can have a major impact on an employee’s financial situation, but if your team doesn’t know what to do with that extra boost you’re offering, they’re bound to repeat the same mistakes over again. For example, a person trying to pay down their credit card balance might be able to do so faster if they earning a bit of extra income through benefits, but if they don’t understand the importance of saving part of each paycheck and how to budget accurately, they’re likely to spend the extra income they earn and continue borrowing money at the same rate, negating the true benefit of your extra assistance.
In that light, offering your employees a way to improve their financial literacy is crucial when creating a financial wellness program. Particularly if you can’t afford to offer the kind of larger-scale monetary benefits we mentioned above, this is probably the most effective financial benefit you can offer your team. Think about how the educational material you provide your employees can be tailored to their level of knowledge and experience with money management. For example, if most of your team is fresh out of college, you might find that they need more help with the basics, like debt repayment and effective budgeting. If your staff is older and are generally in a more comfortable financial position, they may want to know more about how to make the best of their registered accounts and how to invest effectively. If they’re somewhere in between, it might be important to provide all of the above.
If at all possible, remember that this info should be readily available to your team members at all times. Unless you’re going to regularly allocate time during the workday where your team can focus on their personal financial needs, they need to be able access said resources from their own homes, on their own time. This could done by commissioning an online library of financial resources for your business specifically, or it could be by gaining access to an established library for your employees so they can access it for free. At a lower-cost, you could also host seminars, held by internal team members or by guest speakers, on financial topics of note (ex. “The Basics of Investing”) so employees have the chance to interact and ask questions.
Ultimately, remember that education is the key to changing an employee’s future financial situation. Even an employee who earns a six-figure income can live paycheck-to-paycheck if they’re not equipped with the knowledge they need to manage it effectively.
Professional Services
This is similar to the educational component in many ways, but still distinctly separate. Continuing education is extremely important when it comes to financial literacy, but most resources can only provide general rules to consider; they won’t always answer the specific questions your employees have when it comes to their individual situations.
As such, if you can offer your staff members the chance to meet with a professional financial advisor or planner as part of your financial wellness program, it’ll go a long way with them. This could be done by having a financial advisor visit your business on a regular basis (like once or twice a month) to meet with employees and chat with them about their individual concerns. If your team is working from home, scheduling virtual sessions with an advisor for your each of your team members is probably your best bet. Though you could rely on a number of advisors, this benefit will be the most effective if people can continuously see the same advisor over and over again (as they would if they were seeking professional advice outside of their job). This will allow your employees and their advisor to get to know each other, meaning the advisor should be able to offer them better advice than if they were meeting for the first time each month.
Alternatively, you can still provide a major form of professional assistance for your team without covering the costs of year-round financial advice by having a designated accountant or bookkeeper available to help employees prepare and file their taxes each spring. This is something that every Canadian needs to do, so you know your team will see the value in your offer.
Emergency Grants
Finally, if your business can afford to do so, it might be worthwhile to consider running an emergency grant or loan program for your employees. In cases where your employees are suddenly faced with a large financial emergency, an injection of liquid cash can be exactly what they need to get back on track as soon as possible. As such, an emergency grant program is arguably the most effective reactive strategy you can employ to help your staff manage their financial problems.
For example, one of our employer partners, Red Tab Foundation, offers an emergency grant program to Levi Strauss & Co. employees and retirees around the world. Eligible parties are able to apply for short-term financial relief if they’ve been put in a situation that’s jeopardized their ability to provide their basic necessities, pending they’ve sought out support from alternative sources and failed to secure their help. According to their website, an major example of such an event was the fallout created by the 2020 California wildfires for people who worked at Levi’s stores in affected areas. The Red Tad Foundation assesses applications on a case-by-case basis and responds to the applicant within two business days. The maximum grant amount an applicant can earn is $7500 USD, and it’s meant to be put only towards basic living expenses.
Though this would undoubtedly be a more expensive component to offer, it would certainly have a very powerful effect for those in need. As such, a grant program would be likely to have a huge positive impact on your organization’s employee retention and engagement levels.
Final Thoughts on Financial Wellness Programs
Be sure to be measuring your program’s success as it gets underway. Is the plan actually having its intended effect, or are there improvements that need to be made so your investment in the program isn’t squandered? This will likely involve semi-regular check-ins with your employees to ask about the tangible improvements they’ve felt (or not felt) due to the program. You could also consider denoting the success of the program as a key performance indicator for your organization.
Ultimately, financial wellness programs are the way of the future when it comes to employee benefits. Though most people could always use extra income, achieving financial security is about much more than just one’s bank balance. A financial wellness program recognizes that continuing education, professional assistance, emergency relief and more are all just as important as basic monetary contributions, and will help push your business to the next level.
If you’re a Canadian employer interested in adopting an innovative benefits package to retain your employees, reduce the effects of financial stress in the workplace and set yourself apart from your competitors, match-based saving benefits may be right for your business! QUBER is an industry leader in Canadian match-based savings and can offer employers a customized experience using the QUBER platform to facilitate match-based savings with their employees. If you’re interested in seeing a demo of how QUBER can help strengthen your relationship with your employees, send us an email at contactus@quber.ca or visit our Employers page and send us a message using the contact form found at the bottom of the page.
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