Articles

3 Ways to Maximize Profits by Unleashing the Power of Financial Wellness Programs

Shared by FEAT Member Jack Clements and The Clements Group/Hub International 

Elevating employee financial well-being can elevate profitability as well. Here's the transformative impact these programs can have on the bottom line.

By Jack Clements

Financial well-being has evolved beyond being a mere nicety for employees or a recruitment and retention strategy. It has now become a vital instrument for enhancing profits.

The demand for financial wellness solutions is evident. A recent survey revealed 59% of employees think their compensation has failed to keep pace with rising living costs, compared to 52% the previous year.

Additionally, the COVID-19 pandemic caused financial stress in 65% of workers. Among employees who feel financially burdened, nearly half find it difficult to meet household expenses on time every month, with 44% struggling to make even the minimum payment on their credit card balances. Close to a third of full-time employees often or always run out of money between paychecks.

Of the 96% of workers seeking a new position in 2023, 40% are doing so to improve their compensation, with 46% expecting a higher salary due to inflation. Financial stress from an accident, emergency or divorce can lead to increased absenteeism, job turnover and overall poor health for workers.

Given these statistics, it’s advantageous to help the businesses you work with implement a robust financial wellness program to significantly impact the bottom line of their organization. 

Here are three benefits to present to them:

1. It reduces turnover costs. Employee turnover is a costly affair, with estimates suggesting worker replacement can approach $5,000 in upfront expenses and multiply in terms of other costs. Additionally, organizations lose valuable institutional knowledge when experienced workers depart, leading to further costs associated with training new hires and decreased productivity. It is in the best interest of employers to improve their employees’ financial well-being to mitigate the high costs of turnover. 

2. It enhances productivity. Even when financial issues do not directly impact employees’ mental health, they still hamper productivity. Eight in 10 employees worry about their personal finances while on the job. Furthermore, employees spend approximately one-quarter of their work time dealing with financial matters. By promoting financial wellness programs, employers can tangibly increase employee focus and productivity, and with some programs, reward them with perks for doing so.

3. It reduces stress and boosts morale. Financial wellness has a broader impact than solely reducing turnover. Ninety percent of American workers report that money worries negatively affect their mental health. Recognizing the connection between financial wellness and worker wellness, employers should consider providing financial coaching alongside mental health resources. Employees are likely to respond positively to one-on-one financial coaching sessions conducted via phone or video chat, appreciating the personalized and confidential nature of addressing their financial concerns.

The financial wellness solution

Mandated education on budgeting, improving a business’ credit score, debt management and emergency savings should be viewed as an investment in worker well-being rather than an expense or loss of productive time, as it yields long-term benefits for the bottom line. Impact reports can be generated that provide valuable insights into the areas where employees are making progress.

There are all-inclusive financial programs that collaborate with organizations of all sizes to provide every employee with access to trusted financial coaches, unbiased guidance and powerful financial tools such as a retirement analyzer, budget tracker, home affordability calculator, paycheck analyzer and debt paydown calculator. Through a financial wellness platform, employees gain access to reliable resources broken down into relatable terms as well as an array of interactive learning and planning tools to better manage their financial lives, enabling them to transition from surviving to thriving.

By bolstering the financial health of the workplace and supporting employees as they strive to achieve their financial goals, there will be less turnover and more productivity and morale.

About the author

Jack Clements, CPA, CIC, is based in Tucson and is the President of Arizona Operations for global insurance brokerage Hub International.  Jack joined HUB in 2020 as part of the Clements Insurance and HUB Southwest acquisition. He has been in the insurance industry since 1989 and manages a portfolio of challenging and complex cannabis, healthcare, real estate and construction accounts. He is a member of HUB Southwest’s Executive Management Team and heads the operations for Hub’s Arizona offices.