Employee Financial Wellness: Benefits, Best Practices and Examples

If you’re looking for an explanation for the rise in employee financial wellness programs, try this on for size: Employees are stressed, and money is often the main culprit.

Over the past decade, employee financial wellness programs have continued to gain traction, but why are they so important, and how can employers create programs that truly make a difference? Let’s take a closer look.

Why is employee financial wellness important?

Paycom’s own Dec. 2024 survey of full-time U.S. employees revealed that 72% are moderately to extremely stressed about their current personal financial situation. The 12-month moving average as of Dec. 31, 2024, is 71%.

When employees are financially stressed, absenteeism increases and productivity suffers. But even though workers may be physically present, their minds are often preoccupied with their own money concerns. According to SoFi’s The Future of Workplace Financial Well-Being: 2024 Employer & Employee Perspectives report, one-third of the 750 full-time employees surveyed said financial issues are digging into their ability to focus at work, and nearly one-fourth said it reduces their productivity and confidence on the job.

What is an employee financial wellness program?

To understand what financial wellness programs aim to achieve, it helps to start with a basic definition of financial wellness. According to the Consumer Financial Protection Bureau, financial well-being is “a state wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future and is able to make choices that allow them to enjoy life.”

TIAA, an investment and insurance company, asked Americans to define what financial wellness means to them:

• 61% associate financial wellness with feeling comfortable with their financial situation
• 53% believe it’s about having the means to take care of family and others
• 51% define it as freedom from financial worry, with no concerns about money or debts
• 51% see it as feeling protected financially from unexpected events

It’s clear that for many employees, financial wellness is synonymous with feeling secure, stable and comfortable.

Benefits of a financial wellness program

I believe that the key to financial wellness lies in reducing stress. Financial wellness is the absence of financial stress when possible and the ability to cope with it when necessary.

Because when employees feel comfortable, protected and not worried or held back, they’re likely less stressed, too. This is why financial wellness programs are essential for employers looking to support their workers’ overall well-being.

Some benefits of a financial wellness program include:

• improved productivity
• increased employee retention
• better work-life balance
• improved financial literacy

Employee financial wellness program examples

One confusing characteristic of the financial wellness landscape is that the term “financial wellness program” often describes a basket of initiatives loosely strung together. Programs may include:

• financial education
• employee assistance programs
• budgeting and debt management initiatives
• retirement plans
• health savings accounts

Recent changes to the Setting Every Community Up for Retirement Enhancement Act, better known as the SECURE Act, allow employer matching dollars for student loan repayment and student loan assistance, making it a popular wellness benefit.

How to create an environment of financial wellness

With no conventional standard, employers must tailor their programs to their employees’ unique needs. A retailer with an hourly workforce feeling the effects of inflation may focus on budgeting and cash management. On the other hand, a law or accounting firm may offer financial or college planning tools.

Fidelity’s Women’s History Month 2024 Survey found that “stress” is the top word women use to describe their emotions surrounding money. However, nearly 80% say they have taken money action in the past six months or are planning to in the months ahead. The same study revealed:

• 30% of women fear losing all their money
• 27% aren’t confident in their ability to invest
• 26% don’t know how to invest

Still, the no. 1 long-term financial goal for women is to feel secure and not worry about money. As employers, we can help bridge that gap and create an environment of financial wellness in our workplaces.

Best practices for financial wellness programs

Some financial wellness programs operate through an employer intranet portal. Others may offer standalone portals, webinars or in-person seminars. In building our financial wellness program, LifeCents+, my company HerMoney (which offers webinars and small group financial coaching) partnered with a company called LifeCents (which has an established financial wellness portal) to put together our robust offering.

When building your own financial wellness program, consider the following guidelines:

Compelling enrollment funnel

My company uses a financial health assessment to identify an employee’s specific pain points and create a personalized plan from which to start.

Diversity of entry points

As noted earlier, employees have different financial needs. Some are struggling with student loan repayment, while others may be ramping up for retirement. It’s important to provide a variety of educational approaches and meet them where they are.

Scalability

You need the right learning management software to make your program deliverable en masse. It should be capable of tracking course completion and employees’ comprehension of the material and scale with your workforce.

Big kickoff

Unfortunately, financial wellness is not an if-you-build-it-employees-will-come type of endeavor. Launch your program with a splash, then continue those efforts with regularly scheduled campaigns and a “cheerleader” to promote it. That could be the CEO or another leader with reach. Open Enrollment is just one example of a good place to share it.

Is financial stress weighing on your employees? Watch my webinar to learn how pay literacy can be a game changer for their well-being and your bottom line.