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Financial Wellness Can Affect Company Bottom Line

The 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, 

Debt management, and

Retirement planning. 

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.

The average 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.

Article Reference:

Posted by Tara Hill at 1:10 PM

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