ILLUSTRATION BY RUTH MACAPAGAL
Wellness is often equated with adopting new practices to improve one’s life. The process includes changing behaviors and correcting undesirable habits, eventually leading to a better and longer life.
The same concept also applies to achieving financial wellness. Some may think that these are big and complex words. But it’s actually quite simple and doable. But one needs to make pivotal turns in changing financial behaviors and take on more effective money habits that lead to financial resilience.
Yet it is no secret that personal finance is the primary stressor for many employees. This creates a ripple effect in the workplace. If employees are stressed about money, they become distracted, thereby affecting their work performance.
In a recent survey conducted by Plentina—a fintech startup that provides access to credit in emerging markets—eight out 10 respondents say that financial stress is affecting employees’ work, resulting in low productivity, poor work quality and even absenteeism and tardiness.
The problem stems from not having enough resources for everyday living. When asked, survey respondents highlight three main drivers of money worries–unexpected expenses from emergency needs like medical or repair needs for everyday living, paying down debt or needing to resort to debt for everyday needs and not having adequate savings.
The survey was conducted in March covering 100 employees based in Metro Manila, Calabarzon, Central Visayas and Northern Mindanao.
More employees turn to their employers for help when it comes to dealing with financial needs. Based on the survey, nine out of 10 employees expect their employers to provide financial benefit to them because they believe that their employers have access to financial resources and tools that employees may not access to on their own.
In the past, employees only required health insurance and paid leaves to be a part of their employment package. Now, they also expect financial wellness to be a part of their benefits as well.
Offering financial wellness as a vital item of the employee package may seem like an over-the-top request, but it also benefits employers in the long run with the increase in loyalty and retention among employees. Based on the survey, 89 percent of respondents say that they will likely stay with their companies longer if financial benefits were given.
Kat Valencia
How employers can help
So what aspect of financial issues do employees need help with? Kat Valencia, customer retention head at Plentina, says that budgeting and managing spending habits top the list of issues that employees need help with. It is followed by setting up an emergency fund; planning for the long term; owning a house and starting investments such as the stock market.
To address these matters, employers play a crucial role to ease the personal financial worries and goals of their employees. A comprehensive financial benefit program would go a long way to provide employees with the resources and support they need to improve their financial well-being. This may include a range of topics such as good budgeting practices, saving for the future and estate and retirement planning.
“We at Plentina believe that employers have a key role to play in helping their employees address their financial worries. Employers have an opportunity to invest fully in their employees’ financial well-being, thus also improving their business performance, employee engagement and satisfaction and even setting themselves apart from other employers,” says Valencia.
Valencia also shares some ways a company can empower their employees to face their financial woes head on:
1. Conduct a financial wellness survey to assess employees’ needs: Employers can address concerns better if they have a full understanding of its employees’ financial challenges. Assess their financial literacy, financial stress levels and overall financial wellness. The survey results will help identify the specific areas where employees need the most support.
2. Offer financial education and resources: Based on the survey results, you can develop a financial education program that includes workshops, webinars and online resources. The program can cover topics such as budgeting, saving, investing and retirement planning. You can also offer access to financial planning tools, such as financial calculators and budgeting apps.
3. Provide access to financial counseling and coaching services: Employees could schedule one-on-one sessions with professional financial advisors who are unaffiliated with the company to receive guidance on their financial goals and challenges.
4. Offer employee benefits that support financial wellness: Consider benefits such as investment or retirement plans, flexible spending accounts deductible from their payroll and emergency savings accounts. These benefits can help employees plan for their long-term financial goals while also providing financial flexibility for unexpected expenses.
5. Create a culture of transparency and openness around personal finance topics: Reduce the stigma around personal finance. Encourage your employees to discuss their financial challenges and goals openly, creating a supportive environment for employees to seek guidance and support.
“[With these steps], you’re not only helping your employees’ financial wellness and overall well-being; you, as the employer, get to gain from the financial benefit program. As we say in Plentina, when it’s good for employees, it’s good for business, too!” she adds.
Implementing such programs often translates to a host of benefits for the company. These include increased employee engagement and satisfaction; improved productivity and performance; reduced absenteeism and turnover; and increased participation in retirement plans and other financial benefits.
To help companies with their starting point in financial wellness conversations, Plentina is offering its expertise, resources and tools needed to carry out a successful financial benefit program. “Investing in employee financial wellness is not only the right thing to do but also a smart business decision that can benefit both employees and employers,” says Valencia.