How to create and deliver a truly personalised financial wellbeing strategy
What is financial wellness, and how can it be defined? In our e-book Financial Wellness: The Topic You Can’t Afford to Ignore we define financial wellness as:
- the freedom to make life choices
- the ability to survive and thrive in challenging times
- control over day-to-day finances
- having the resources to plan for the future.
Wellbeing and your finances
The term financial wellness is made up of two words, which cannot be separated. They are intrinsically linked. After all, it’s unlikely an individual can experience high levels of wellbeing if they’re stressed about their finances.
Bank of America’s Workplace Benefits Report (2017) revealed that 56% of employees say they are very or somewhat stressed about their financial situation.
The report showed the top three financial stress factors are:
- Saving for the future – 67%
- Paying monthly bills – 57%
- Credit card debt – 42%
Why employers should care
The financial wellness of employees might seem like a private matter for individuals, but the financial stress and hardship of employees can have a significant impact on a company’s bottom line.
The Bank of America research also found that more than half of employees believe stress caused by their finances regularly interferes with their ability to focus and be productive at work. Barclays’ Financial wellbeing: the last taboo in the workplace (2014) report estimated that, for every £1 million an organisation spends on payroll, there is a 4% loss in productivity due to poor employee financial wellbeing.
Besides improving productivity and profit margins, supporting the financial wellness of employees is the right thing to do.
Supporting employee wellness
One of the most effective ways of supporting employee wellbeing is through the benefits offering. And a benefits plan with a particular emphasis on financial wellness support is the way to go.
However, for a company’s benefits offering to have a positive impact on employee financial wellbeing, it needs to be beneficial to each individual. And that’s the trick. Every employee has their own preferences and needs depending on what financial stage they are at and whether they’re a baby boomer, a Millennial, or Generation Z.
A personalised offer
In today’s climate, the ability to address each generation by personalising the benefits offering is crucial. This can be achieved by catering to the needs of the individual and giving each employee the flexibility to choose from a range of financial wellness options so they can decide what is most beneficial to them.
This is where a flexible benefits model is most useful. A flexible benefits plan enables companies to address and support the financial wellness of each employee by ensuring every individual’s needs are met.
A flexible benefits plan created by the employer allows employees to select from a variety of pre-tax offerings to create a customised benefits package that best fits their requirements. For example, the offering may allow employees to choose a preferred supplier or select the pension or insurance that best suits them.
The Bank of America’s Workplace Benefits Report (2017) shows that financial counselling services and tools aimed at budgeting, saving and investing are definitely something employees want – with 86% of those surveyed saying they would participate in a financial education programme provided by their employer. So, think about which financial wellness services you can offer as part of your flexible benefits plan.
In summary, a flexible benefits model enables companies to address and support the financial wellness of each employee by ensuring every individual’s needs are met.
Want to learn more? Download our free e-book Financial Wellness: The Topic You Can’t Afford to Ignore.
This article was provided by Benify.
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