Before the corona pandemic, a report from 2017 exploring trends and shifts in thinking about employee financial benefits revealed that 56% of employees were very or somewhat stressed about their financial situation.
Today, with the ongoing situation, this number is likely to be even higher with less job security, layoffs worldwide, and many employees forced to reduce their working hours.
Financial well-being or economic security is a vital component of our overall well-being. After all, it’s unlikely we will experience high levels of well-being if stressed about our finances. Today, more and more organizations understand the importance of looking after their employees’ financial well-being.
Doing the Right Thing is Also Smart Business
Bank of America’s 2020 Workplace Benefits Report reveals that 62% of employers say they feel “extremely” responsible for their employees’ financial wellness today. Besides being the right thing to do, prioritizing employee financial well-being is also smart business:
- Financial concerns not only affect employee well-being and productivity but the company’s bottom line due to increased sick leave and absenteeism.
- Prioritizing employee financial well-being is a great way for organizations to strengthen their employer brand and, in turn, attract talent.
- Making employees aware of all the different components that make up their total compensation is a powerful way to support employee retention. After all, why would employees want to go elsewhere if they know their financial well-being is supported, and they are compensated well by their current employer?
Make Information Clear and Available
In Benify’s Compensation Gap survey, it was discovered that 8 out of 10 employees underestimate their total compensation package. What’s more, on average, employees are unaware of up to 33% of their total reward, including pensions, bonuses, company shares, insurances, meal subsidies, and employee benefits. Without the awareness of what financial benefits, tools and services are available to them, how can employees experience positive financial well-being?
One of the simplest yet most effective ways to increase awareness is to make information pertaining to compensation and benefits easily accessible and available. Most leading organizations today are using an employee benefits platform of some sort. By enabling employees to log in to their employee platform to access resources, find advice and information about their finances, including pensions, savings plans, and insurances, employers can direct their employees to one place.
If your benefits platform provider has its own app, employees can access this information from the palm of their hand. For example, say an employee wants to see what insurances they are currently enrolled in or what savings tools are available; he or she can simply launch the app and browse their employee platform anytime, anywhere.
Getting a Clearer Picture
In addition to offering the right financial support, financial wellness is about making employees aware of your full investment and the true value of their total reward.
The best way to communicate and create awareness of total reward is to provide employees with a clear visualization of their total compensation package in the form of a digital Total Reward Statement (or TRS) available through their employee benefits platform.
A Total Reward Statement calculates and assembles a visualized breakdown of an employee's total compensation package, including insurances, pensions, employee benefits, and any additional compensation (e.g., bonus or company shares).
A Total Reward Statement can also be a powerful tool to show your full offer during the recruitment and onboarding stages. Presenting candidates with an illustrated breakdown of your offer displays transparency and creates greater financial awareness.
A company is only as good as its people. Therefore, employee financial well-being is not a personal matter but also a business matter. As Malcolm X famously said: “when "I" is replaced with "we" even illness becomes wellness.”
Looking for more tips on how to increase the financial wellness of your employees? Download our e-book, Financial Wellness: The Topic You Can’t Afford to Ignore.