Improving employees’ financial wellness may boost company performance, too

May 01, 2024

employees in a meeting in a conference room

Many employers promote health and wellness among their workforces. Some even offer fitness classes, provide ergonomic workstations and encourage mental wellness by promoting a good work-life balance.

But what about financial wellness? Employees may not feel confident about their financial outlook, especially with inflation concerns, market volatility and other economic uncertainties.

Financial professionals and plan sponsors can play a critical role in helping to improve workers’ financial wellness. Furthermore, when employees are financially fit, it may also help the company’s bottom line. 

Why financial wellness matters

Recent studies have shown that a significant percentage of employees experience financial stress, affecting not only their health and personal lives but also their work performance.1 

In a 2023 PwC survey, 60% of full-time employees said they were financially stressed. Interestingly, that figure is slightly higher than during the pandemic's peak. Stress isn’t just affecting those with lower earnings; nearly half (47%) of those earning $100,000 or more annually also expressed financial stress.1

It should come as no surprise that the effects of financial stress extend beyond someone’s bank account. Survey respondents said that financial stress and money worries negatively impacted other crucial aspects of their everyday lives:

  • Sleep (56%)
  • Mental health (55%)
  • Self-esteem (50%)
  • Physical health (44%)
  • Relationships at home (40%)1

It’s no wonder that investors are stressed. In our 2023 Retirement Participant Education Survey, only 25% of respondents feel confident in knowing how much money they need to comfortably retire.2

Employees who are financially stressed are nearly five times more likely to say that those financial issues have caused distractions at work, and 56% spend three or more hours per week dealing with or thinking about personal finances during work hours. Plus, financially stressed employees are less engaged and more likely to seek new employment.1

Financial professionals can play a crucial role in addressing these challenges by promoting financial literacy and wellness among plan participants.

The path to financial education

The first step in fostering financial wellness is through financial education. A well-designed financial education program isn’t a one-time event but a continuous effort tailored to meet the unique needs and preferences of employees. It should cover essential topics such as investment basics, risk management, budgeting and retirement planning. 

Employers can utilize various formats for this education to help make the program accessible and engaging for all employees. Employers can develop their own programs, or take advantage of financial education programs offered by their plan administrators. Some examples might include:

  • Online tools, quizzes or calculators
  • Seminars, in-person or online
  • Articles from reputable sources
  • Video content
  • In-office presentations
  • One-on-one meetings

It’s important to remember that employees come from diverse backgrounds and have varying financial situations, goals and challenges. Personalized content that reflects employees’ specific circumstances may significantly enhance engagement and learning outcomes. 

We’ve developed a helpful infographic outlining four ways to impact financial literacy growth in participants. Access it below:

Four ways to impact financial literacy growth in participants

Promoting program participation

Awareness and participation are critical, so it’s important to actively promote financial wellness programs, highlight their benefits and make them easily accessible to all employees. This could involve promotional campaigns, informational sessions, and incentives for participation. Showcasing the program's value and how it complements other benefits may also increase employee engagement and participation.

The broader impact of financial wellness

The roles of financial professionals and plan sponsors extend beyond just managing assets; they also need to educate and empower individuals to take charge of their financial futures. 

By promoting financial wellness, we not only help individuals achieve their personal and retirement goals but also contribute to the creation of healthier, more productive workplaces. Let’s commit to making financial wellness a priority, fostering an environment where employees feel supported, informed and confident in their financial decisions.

1 PwC, PwC's 2023 Employee Financial Wellness Survey, 2023
2 CunaMutualGroup, Four ways to impact financial literacy growth in participants, 2023