By Thomas Charla
Posted on Dec 2, 2020
As a business owner, you’re constantly looking to add value. You invest in innovation. You utilize models of efficiency. You follow best practices. But have you invested in employee financial wellness, specifically employee financial education? If not, you may be missing an important opportunity to add value.
You may already realize some of your employees struggle with financial stress. In MassMutual’s 2017 Small Business Employee Financial Wellness study, business owners said they believed only a slight majority of their employees—55 percent—were good at managing their own money, and only 45 percent could manage a financial setback.1
This finding aligns with a 2017 report by the Federal Reserve Board which found that 40 percent of Americans don’t have the cash on hand to absorb an unexpected expense of $400.2
If you worry about your employees’ financial health, you’re not alone. In the MassMutual study, close to two thirds of employers said they consider employees like family, so worrying about their well-being is natural. Despite that sentiment, you may be unsure of how to approach such a personal issue like financial stress. You want to do something, but what?
Offering professional, objective employee financial education provides business owners with a non-intrusive, but concrete way to help employees manage their day-to-day financial well-being. In turn, employee financial education can yield tangible business results, including:
Increasing productivity and workplace engagement. According to MassMutual’s employee financial wellness study, 74 percent of small business owners said employee financial well-being plays a significant role in workforce morale and productivity. Additionally, 56 percent of business owners said productivity levels would increase significantly if employee financial stress were not always “a source of anxiety and distraction.” Independent studies back this up: A 2017 PwC survey found that 46 percent of employees distracted by financial stress reported spending three hours or more each workweek dealing with personal financial issues.3 Reducing employee distraction can help to boost both morale and productivity.
Attracting and retaining top talent. With nationwide unemployment rates the lowest they been in years, attracting and keeping high-quality workers is a real challenge. Today’s new hires expect more in terms of work-life balance, and look for benefits to help achieve those objectives. Millennials in particular are open to employee financial education, according to a 2017 MassMutual Workplace Benefits study: 70 percent would welcome financial planning services and 60 percent are interested in budgeting assistance.4 Financial education shows employees you care and may help employees feel valued, encouraging longevity. Nearly half of employees surveyed would welcome additional help or guidance on personal finances from their employer, with 51 percent expressing a desire for more employer education about saving for retirement.
Complementing existing employee benefits. Employee financial education can also help employees get the most out of the benefits you already make available to them. Learning how to budget or understand asset allocation will help employees better utilize retirement plans, such as 401(k) benefits. Employee financial education may also bolster the health benefits you offer and help your employees use them more efficiently. For example, you may offer health savings accounts, but do your employees know how they work, how to maximize the benefits they provide, and the important role they play in addressing future healthcare costs in their retirement?
Employee financial education is more than a cool workforce perk, like gym memberships or company outings. It’s an integral part of an overall financial wellness strategy for your business. Offering employee financial education is the smart thing to do, for your employees and for your business. It’s an opportunity to add value that can strengthen many aspects of your business.
The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of MassMutual. Provided by Christopher Price, a financial representative with Coastal Wealth, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). CA license #4196813. ©2022 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001 RK202511-303685
