The answer to the next phase of financial wellness
Employers think of financial wellness as a program or set of programs needed to help their employees improve financial behaviors and outcomes while driving business impact, according to HelloWallet. But on the other side are employees who would like to have a better understanding and be confident of how their finances can prepare them for their life changes.
Across generations — millennials, Gen X and Baby Boomers — the top three financial concerns are, according to PricewaterhouseCoopers:
- Everyone wants to have enough in emergency reserve
- Everyone wants to retire one day
- Everyone wants enough money to pay basic living expenses
Because finances tend to be overwhelming and many workers haven’t had formal training in personal finance management, it causes stress. That affects how employees perform at work and at home.
It is interesting to note that the older workers get, the less financial stress they tend to experience. Only 41% of boomers are stressed out compared to 57% of millennials and 59% of Gen Xers. Currently, millennials are the largest generation in the workforce. If you want to have a thriving business and happy employees you must act quickly to help them.
Employees in stressful financial circumstances are less productive and less likely to remain at their jobs. According to PWC, “46% of workers spend three hours or more during the workweek dealing with or thinking about financial issues, which results in $5,000 per year in productivity loss.”
A report from AON Hewitt shows that 89% of employers are likely to add financial wellness tools and services to their benefits offerings in the next few years. Most of them feel it’s the right thing to do. They also believe financial wellness can increase employee engagement, improve retirement statistics and decrease time spent by workers during work hours dealing with financial issues.
Workers are dealing with comprehensive financial challenges and employers can’t just offer a 401(k) with a match or life insurance or disability policies and feel they’ve covered it.
The answer already exits. It has for the last 32 years as the profession of financial planners has evolved. Currently, there are 70,000 CPFs in the US. CFPs go thru rigorous training, take a seven-hour comprehensive exam with a pass rate of 55% and work in the industry for at least three years to become accredited.
CFP professionals work with employees addressing cash flow and budgeting, building savings, rent versus buy decisions, portfolio allocations, debt management, insurance needs, education and retirement planning.
Even better: Comprehensive financial planning can help increase employee participation in benefit plans.