Employee Financial Wellbeing
Table of Contents
Take care of your people and protect your business with Eddy
Table of Contents
What Is Employee Financial Well-Being?
Financial well-being is the state of being healthy with regard to money. In regards to employees, it is in a company’s best interest to invest in the financial well-being of their employees to assure maximum productivity and minimal absenteeism. This is often done by way of providing a compensation package inclusive of sufficient pay and benefits, as well as guidance on how to use these resources efficiently.
Why Is Employee Financial Well-Being Important?
The employee who’s achieved financial well-being is able to live comfortably without worrying and fretting over money. They’re not stressed out all the time and have an air of confidence about them that comes from being in control for once instead of feeling like they are at the whims of outside forces.
Conversely, the employee who is not financially secure is often stressed out and easily loses focus on the task at hand. They have a hard time trying to make ends meet for themselves or their family members due in large part because of their lack of money and inability to manage what they have very well.
There are two major problems that occur for both employee and employer when financial wellbeing isn’t top of mind:
- Loss of the the Mutual Vision – Increased Employee Turnover
- Lack of Focus – Decreased Productivity
Loss of the the Mutual Vision – Increased Employee Turnover
If a person’s finances are unstable, it will affect their focus at work. If this continues and the issue becomes worse there could even come a point where they lose interest in the bigger picture of the company itself. If this problem is allowed to continue the employee will eventually walk away.
The ability to keep employees is crucial for any business, but it becomes even more important when you consider the financial implications of turnover. Training new employees takes time and decreases the productivity rates of other employees. Not having enough workers is a constant strain on the business as a whole.
Lack of Focus – Decreased Productivity
Financial worries are among one of many sources which can cause people great amounts of discomfort when dealing with day-to-day tasks. If an employee finds themselves going through something like an ugly divorce, for example, the stress caused from this event can cause an employee to lose focus on the task at hand.The problems created from a lack of focus can manifest as a general drop in productivity to a misstep in simple safety protocols that could lead to disaster.
The cost to the company of an unproductive employee is time and money. The company’s reputation is on the line when an employee does not perform their job duties well, and the employee’s mistakes can lead to costly consequences, especially if a misstep in safety occurs.
Challenges Companies Face When Trying to Improve Employees’ Financial Well-Being
Challenges can arise when a company doesn’t understand how to properly financially secure their workforce because knowledge on this topic hasn’t always been widespread.
1. Making an All-Inclusive Compensation Package
Most companies only think about what they want to offer when designing their plans but don’t really take much time thinking through what actually works for creating financial well-being for their employees. It doesn’t necessarily take serious research over months or even years to understand what employees need and want to feel financially secure, but businesses still struggle nonetheless.
A simple way to begin attacking this problem is to understand that employees want their compensation to be high and their benefits to be powerful. Then ascertain where your company currently stands in regards to the employment cost index to see just how competitive you really are next to everyone else. For more information on the employment cost index, see my article on that here.
2. Staying Budget Friendly
You may have heard the phrase costly to carry before. That’s because every business wants their employees to feel that at least their financial needs are being met fairly.
One way around this problem is providing employees with voluntary benefits. Evolving more and more everyday, voluntary benefit providers are progressively including more ways for employees to pay less and still be able to afford insurance like vision, dental, legal and pet insurance. This way you can provide for your employees while steering clear of the bottom line altogether.
3. Standing Out From the Crowd
The market for talent is very competitive and there’s a lot of pressure on hiring managers to get their bench strength back to full. Differentiation in what you offer will help land the best possible hire. Be sure that your organization stands out from other companies or individuals by offering financial wellness incentives that do more than just line their pockets.
By bringing value to an employee’s health, finances and mental well-being, you position yourself to attract the best talent in today’s candidate-first culture.
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Questions You’ve Asked Us About Employee Financial Well-Being
I spent much of my working life in a whirlwind of uncertainty wondering when I would find a career that would make me happy. After spending 23 years trying to find that ‘dream career’ I came to a sobering conclusion.
I realized that I wasn’t looking for a career, but for a purpose and that I would never be happy until I figured out what that purpose was. After a long hard road of trial and error, I concluded that my purpose, the very activity that brought me happiness was when I could bring that happiness to others first. Removing the vast amounts of uncertainty this life can bring for others and replacing it with true peace of mind, gave me my much sought-after peace of mind.