The last two years have been anything but easy, prompting a whirlwind of changes in how and where people work. Technology became more imperative than ever by allowing the world to stay connected whether working on-site or at home. A KPMG report reveals that nearly all employers were eager to do what they could to make the transition back to the office as seamless as possible.
This meant investing in technologies relating to both employee wellness and workforce health tracking. And their efforts seem to be paying off – 41% of enterprises have made progress in enhancing employees’ total well-being in recent years. Twice as many say that it is important to do so over the next three years.
Considering the current predicament that employers face – they risk losing additional talent as millions of people resign every month – organizations need to do everything they can to improve employee happiness and well-being. Unhappy and unwell employees are more likely to burn out, quit, and share their feelings on job review sites, which could deter future prospects from applying. That last part is noteworthy: a Fractl survey shows that 84% of Americans consider reviews before applying for a job. One in three have actually turned down an offer because of a negative review.
In other words, employee well-being is everything – and financial well-being is a critical part of that. With inflation hitting another new high in June, and our latest research showing that 88% of Americans are worried about how it will impact their day-to-day life and purchasing power, employers must act fast. They need to recognize that four out of 10 employees are living paycheck to paycheck, and more than two-thirds feel ashamed, angry, and depressed about their finances. Consequently, many (76%) feel pessimistic about the United States’ – and their own – financial future.
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Overcoming such pessimism might seem impossible for business owners, but there’s a readily available solution at their disposal: empower employees with the necessary tools and education to help them plan, prepare, and organize their finances for a brighter financial future.
Deploy the right tools to improve employees’ financial standing
A lot has been written about The Great Resignation, but one of the most critical learning involves the way employees perceive their relationship with their employers. More than half (58%) of Americans believe they are – in the eyes of the companies they work for – interchangeable and easy to replace. Furthermore, 41% say they only show up for a paycheck, and 22% of younger employees (under age 35) are less likely to feel connected to their employer.
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The negative sentiment is even worse for women, with 66% feeling hopeful about their financial situation (compared to 83% of men) and only 51% expressing contentment (versus 75% of men).
Additional research shows that more than 73% of financial professionals are men, increasing the likelihood that financial literature caters to that gender. Women (particularly mothers) are also three times more likely to have lost their job during the pandemic, so it’s more important than ever for businesses to provide an impartial solution to their diverse workforce.
It is equally important for employers to create a cultural environment that encourages people to stay. Location Labs, a mobile security firm, achieved a 95% retention rate after developing a culture of open and honest discussion, trust in one another, and outstanding loyalty. The company rewarded that loyalty by avoiding layoffs. Other firms, including Goodwin Living, Giant Food, and Great American Restaurants have found success in retaining employees by meeting their financial well-being needs, supporting staff with free gas, prepared meals, and discounts on groceries.
Create a stronger employer-employee connection
Financial well-being – and the stress that follows when issues are not addressed – must also be factored into the bottom line. At a 2021 cost of $2,412 per employee via lost productivity and absenteeism (versus $2,169 in 2020 and $1,918 in 2019), financial stress is an enormous expense. The overall cost, which includes lost productivity and absenteeism, can be quite significant to employers. John Hancock’s calculator estimates that financial stress will cost $241,200 for an organization with just 100 employees, and more than $2.4 million for a business with 1,000 employees.
By deploying the right technology to financially educate their staff, enterprises can reduce these unnecessary expenses and improve their employees’ well-being. In fact, our research shows that when provided financial education benefits, employees are less worried about money and are therefore 20% more likely to experience hope and contentment with their finances. They are also 24% more likely to feel connected to their employer, which is imperative during The Great Resignation.
Sixty-one percent of respondents said that having diverse benefits, such as financial education support, helps to build commitment to their employer.
This was especially true for young, high-earning employees; 66% felt connected to their employer (compared to 43% of those who do not receive financial education benefits). Thirty-five percent of high earners who receive financial education benefits say they trust their employer – more than double the percent of high earners who trust their employer despite not receiving those benefits.
Trust is essential to the success of every enterprise; a PwC survey shows that employees who trust their employer experience a 50% increase in productivity, 74% less stress, and are 76% more engaged. That, in turn, can lead to other organizational improvements.
A Gallup poll shows that engaged employees realize 10% higher customer metrics, 20% higher sales, and 21% higher profitability. This suggests that by improving employees’ financial well-being, employers can create other benefits that support both staff and the business.
Become a driving force for financial well-being
In 2021, only 45% of Americans were anxious about their current financial situation – today, 77% are anxious. Given the current trajectory of inflation, including record-breaking gas prices, their anxiety is unlikely to abate anytime soon.
Employers have a unique opportunity to assist their staff through this difficult period by procuring and delivering financial tools that can help them achieve their goals. For example, employees are especially interested in receiving educational support to plan for key life movements, including the skills to grow a savings account (33%). This is important considering that the personal saving rate went from 33.8% in April 2020 (the highest on record) to 4.4% in April 2022 (the lowest since 2008). Employees also want to save for retirement (36%) and reduce debt (28%).
Organizations can live up to these expectations and become a driving force for financial well-being by using an impartial educational platform that demystifies money management and provides the skills to improve financial well-being. The result will be a stronger employer-employee connection, ultimately improving retention, productivity and employee happiness.
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