Financial Wellness At Workplaces: Why It’s Critical

The role of financial wellness in organisations is undeniably of utmost vitality. Complex organisational structures and modern corporate lifestyles often heighten stress levels among employees. Stress is now ranked as the top lifestyle risk factor, with more serious repercussions than obesity and physical activity. And financial concerns of individual employees are the biggest factor impacting health and wellness.  

A recent survey by PWC concludes that 61% of working adults experience financial stress, 52% of employees feel that financial stress hampers their work productivity and 28% reported distraction from work as a side effect of personal financial problems. Either the employees are highly uneducated to plan their investments and savings or the employees face dissatisfaction with their financial status and financial difficulties.

A Tower Watson report suggests that 72% Indian employers expect greater focus on Health and Productivity (H&P) in the future, and believe that an organisation’s health and productivity effectiveness is directly related to its financial success.

Financial status and financial planning, once overlooked by most organisations, is gaining momentum and being recognised as a major factor that directly impacts employees’ morale and stress level. Today a large chunk of Indian firms recognise human resource as the most dynamic yet essential element that could yield them revenues and success. A financially stable and sound employee is considered as a hallmark of productivity, engagement and sheer focus.

Improving financial wellness of the employees can be fruitful in several ways – like healthier employees, lower turnover rates while raising employee satisfaction, reduced absenteeism and improving the employer’s brand. The approach can be holistic and inclusive by guiding every employee towards action through financial wellness program.

These financial programs seek some basic objectives, such as:

1. Educating the workforce on personal financial management.
2. Setting long term plans regarding future financial goals.
3. Reducing the overall stress levels for better productivity and satisfaction.

‘Globally, companies with most effective H&P programs have 34% higher revenue per employee.’ ~ Towers Watson report

The Towers Watson report further states that focus on H&P in India is growing and is the highest in the Asia Pacific region. 96% of the employers feel H&P plays a moderate to essential role in an organisation’s health strategy. Already, 48% of the Indian companies already have a health and wellbeing strategy in place, while 44% more have such plans in the pipeline. The primary goal should be on tangible improvement in employee well being by initiating and implementing a robust health strategy rather than copying the existing popular ones.

How financial wellness programmes can bring greater productivity

A number of programmes – such as biometric screening for health risk assessments, onsite health programs, cash as an incentive to encourage program participation, gifts and flex spending credits, sponsoring individual or team competitions – take care of encouraging employee participation and increasing employee interaction. Employers across India also indulge in offering some form of financial guidance and education concerning estate planning, budgeting, debt management, wealth creation, risk management and tax assistance.

Financial wellness is a well thought out and structured program, or set of programs, designed to assess employees’ current financial health and improve their financial behavior while also impacting business outcomes.

The recent financial depression across the globe and fluctuating economic conditions call for such programs as sine qua non to retain employee attention and interaction. There are several advantages of such programmes:

1. Improved physical and mental health of the employees, with employees being less prone to financial stress.
2. Increased employee retention and engagement due to lower absenteeism. The Towers Watson report suggests that a company having a wellness programme for its employees has 1 less leave taken per employee each year.
3. Productivity is enhanced since employees no longer face financial hassles. They’re better able to manage their private and professional life.
4. An overall positive effect and benefit for employers and organisations is exhibited in long term reduction in health care costs, with a healthier workforce granting greater productivity.
5. For the senior employees, these programmes create more affordable retirement opportunities.
6. Opening up career advancement opportunities for younger workforce.

With a clear understanding of the nature of business, work environment and public relations, organisations can shape their financial infrastructures and salary structures to frame fruitful employee financial wellness programmes, that ensures corporate commitment, employee presenteeism and loyalty for the organisation.