problem of financial illiteracy is widespread throughout the U.S and it can
directly impact workplace productivity.
There are clear causal relationships
between people who are financially stressed leading to higher costs in the
workplace compared to those who are not financially stressed. Employees who are
stressed financially tend to have higher health care expenses, costing about
$300 per employee per year stemming from anxiety, insomnia, headaches and
depression. There is also evidence showing that when employees can’t afford to
retire there is a real cost to the company. An older workforce that delays
retirement in order to accumulate sufficient assets can cost the employer about
$10,000 in insurance premiums per employee per year, assuming employees are in
their mid-sixties, compared with employees in their 40s.
Thus, successful employee financial wellness programs may
affect the company’s bottom line. Effective financial wellness programs have several
key points including information on:
Holistic spending and budgeting,
Instead of simply taking a scattered
approach to benefit programs, using financial wellness can bring everything
together if it is delivered well. The program should be
provided to everyone in a workforce and individuals should receive customized,
actionable information delivered across multiple media platforms. Activities
can be measured and tracked, and the results reported back to clients.
cost to implement a financial wellness program depends on the features and
services. An average program for 10,000 participants would cost about $50,000,
but could be less. Several online calculators can help assess the return on
investment for implementing a financial wellness program, including the
Personal Financial Wellness (PFW) scale available from the Personal Finance
Foundation, and Boulevard R’s own Retiremap.
No matter how
strong a company’s retirement and benefits plans are workers often don’t bother
to figure out the best way to participate or take advantage of it. The problem
is made worse when employers take the attitude that it’s up to the participants
to educate themselves. The employer has
a huge economic incentive to help participants figure it out. You can make a
strong, rational economic argument that it is good business for to put together
a financial wellness program.