Many find the road to financial well-being to be tough, and the pandemic is likely creating additional obstacles on that path. This article explores the importance of financial well-being and how employers can help employees, especially during the COVID-19 pandemic.
Why It Matters
Why should employees’ personal financial well-being be a concern for employers? To start, financial matters are a leading cause of stress for employees and a major distraction at work. A recent PwC survey revealed that 58% of employees admit that they’re stressed about their finances. Employers can alleviate some of that stress to help employees focus better at work. As a result, the workforce could experience higher engagement, increased productivity, fewer absences, and improved health and well-being.
Additionally, many employees are unprepared for an extended economic downturn or recession and may not have enough money saved to cover emergency expenses. As a result, employees are apt to use money held in their retirement plans to pay for those unexpected expenses—or make short-term financial decisions that may have a negative long-term impact.
Oftentimes, employees need general guidance on how to prioritize spending, pay bills and handle creditors. Especially during the pandemic, employers have a unique opportunity to help employees avoid making poor financial decisions at the expense of their overall financial well-being.
How to Help Employees
An employer’s role is to support employees—including their overall well-being. Notably, well-being has risen to the surface during the pandemic as employees may be struggling to cope with the uncertainty. In fact, more employers than before feel responsible for helping improve employees’ financial well-being and reduce stress from the COVID-19 pandemic. According to a recent Bank of America survey, 62% of employers feel "extremely" responsible for their employees' financial well-being, compared with 13% in 2013.
Employers can play a key role in supporting the financial well-being of their employees, and should consider the following ways to improve employees’ financial literacy:
In general, employers should continue their due diligence in reviewing and adjusting benefits offerings so they align with employees’ evolving needs. Benefits that may impact the current financial challenges employees face include options such as student loan payback programs, discount programs, life or disability insurance, and retirement plans.
While employers can have an impact on the financial well-being of their employees, it’s also important for employers to acknowledge employees’ stress, which is often amplified by the pandemic. Keep in mind that financial stress also impacts mental and physical well-being. Beyond the critical financial decisions needed to get through the immediate impact of the COVID-19 pandemic, many employees may be eager to utilize guidance and resources as they recover financially and prepare themselves for future financial matters.
Understandably, just as personal financial situations may be strained, organizations may be experiencing financial challenges as well during the pandemic.
For additional financial well-being resources, contact us!