How financial wellness programs can help retain talent

Employee benefits have drastically changed in recent years. As our lives become customizable, convenient and generally take the shape that works best for us, so too have the benefits employers provide to their employees.

Consider hybrid work: remote work became a staple to try to survive the early days of the COVID-19 pandemic but eventually became a legitimate option for some workers. Workers in offices could—and can—come in once, twice, or zero days a week. This more hybrid and flexible approach to work encouraged employees to better balance their work, health and personal lives.

Personalization of employee benefits is going to come up a lot in the coming years. Talent leaders are going to need to reassess what they offer and how they can compromise to retain employees. According to research, employees who feel their experiences are supported at work can drive a 78% retention rate. Financial wellness programs are a crucial way to accomplish this goal. 

A comprehensive financial wellness program can help differentiate your workplace from others, enabling you to recruit top talent, retain more employees and ultimately stay more competitive.

What is financial wellness?

Financial wellness is the security and safety a person feels in their financial situation. It’s determined by their relationship to money and how they think about it. Like other wellness definitions, financial wellness varies by what a person needs or wants.

Financial wellness can include planning for one’s future, like retirement, which is a very common option employers offer. But this can also mean being able to maintain daily finances, managing budgets, and feeling a financial flexibility that—in the event an emergency occurs—ensures a person won’t feel trapped. 

Employees are struggling financially

It’s no secret that we’re living in the middle of a cost-of-living crisis, with people across the board struggling to make ends meet. In a Consumer Financial Protection Survey, 36% of households noted had trouble paying off at least one bill.

In ZayZoon’s annual report on the state of employee financial wellness, we surveyed 5000 employees and 500 HR professionals to better understand how employees may be feeling the squeeze on their finances and the portrait it painted is striking. 

While inflation seems to be cooling down, there are so many other external and internal factors that can—and will—contribute to how far our money goes. And for those of us living paycheck to paycheck, that’s an immense amount of stress. HR leaders noted in our report that this scenario applies to 61% of the employees with whom they engage.

When asked about how they feel about their finances and how often they think about them, 35% of employee respondents told us they are stressed about it daily. Drilling down deeper, 20% noted they were very stressed about it, which signals that employees are likely feeling a whole host of other symptoms related to this key issue. 

Financial stress happens at work 

Try as a person might to keep a boundary between work and their home life, stress will leak out just about everywhere. HR leaders told us that employees feel some of the following at work:

• 65% said there’s a lack of focus 
• 51% said low morale in the workplace
• 47% experienced employees’ lower quality of work
• 44% saw employees withdraw from teammates
• 42% experienced employee unexcused absences
• 41% experienced employees with a negative attitude

There’s an abundance of other examples but it’s very clear that financial stress and a lack of financial wellness will deeply impact how productive, happy and attentive employees will be in the workplace. 

Financial wellness benefits help employee retention

With the statistics above, it’s clear to see that employees really go through it when they’re feeling stressed about finances. Those numbers don’t contextualize other aspects of home life, so the stress your employees face may be much more insidious. 

While employees who face constant financial stress see their work performance take a hit, so, too, can employers see the impact on how their business runs. For instance, employers who implement ZayZoon report at least 8 hours per month reduction in absenteeism per employee. We've also estimated that an employer can save $95,000 on hiring costs in a 1,000-employee company. 

It’s not just a business’s bottom line that is impacted by a lack of financial wellness benefits. Consider the manual labor and time needed to hire new employees who have been let go or quit due to chronic stress. Your HR leaders are impacted if they’re constantly in a hiring cycle. 

In a report conducted by the Bank of America, 84% of employers noted that offering financial wellness programs helps improve employee retention. Not only that but 81% said that these programs help attract quality talent. Here, efforts to keep employees in their roles—and satisfied in them—has an enormous impact on future talent and recruitment. People want to work for places that treat them well, and adding financial wellness offerings to that rotation really pays off for employers. 

What financial wellness programs can you offer employees? 

Many businesses choose to help employees by investing in a financial wellness program that will aid by educating employees on financial topics, giving them tips to manage their savings, showing them how to budget for their expenses and upcoming financial goals like retirement planning, and even having access to financial advisors that can help employees in their particular financial journey. 

Financial wellness programs that may improve retention include: 

• Financial education: Give your employees the opportunity to learn about everything about finances without shame or judgement from budgeting 101 to high-risk investing for retirement.
• Financial tools: Provide access to a number of different calculators, like mortgage or childcare or savings.
• Financial advisors: Sometimes having one-on-one access to a financial advisor can help kickstart or boost an employee’s confidence in handling their own finances. 
• Student loan repayment: Currently, there’s $1.73 trillion in student loan debt that needs to be repaid. Directly providing money to this for employees can be a tremendous help. If other businesses are offering this as a benefit, it may attract quality talent away from yours. 
• Gift cards and perks: Not all financial wellness needs to be future-planning. Sometimes, small breaks or rewards just because can help people feel motivated and cared for. ZayZoon offers a range of gift cards to spots people frequently shop at, like Amazon and Wal-Mart, as well as gas cards with a 5% top-up so employees can go a little further to get what they need. 
• Flexible pay with earned wage access (EWA): Bi-weekly or monthly pay periods don’t account for emergencies, necessities, or generally just needed access to money the second a person needs it. Earned wage access (EWA) tools like ZayZoon’s empower employees to access their pay ahead of a scheduled payday at their own convenience. 
  
  

Earned wage access (EWA) can improve employee financial wellness

In our state of employee financial wellness report, HR leaders told us that by offering EWA there was a 29% reduction in employee turnover. Nearly half of these leaders said that EWA helped improve and streamline operations. 

EWA is a way for employees to manage their pay and finances however they choose—and be happy about it! Our report found 64% of HR professionals saw an improvement in employee morale because of EWA. Additionally, 63% of those talent leaders saw a rise in employee productivity because they had access to the tool. 

Think of EWA like any other benefit that’s available to an employee. It’s something they can choose to use, or not, at their leisure or in a time of need. For employees who have health and wellness benefits, we don’t often think too long and hard about deserving them or using them in a time of need. They are simply there for us to use. EWA is a lot like that. It’s a benefit and an additional tool in an employee’s vast toolbox of health and wellness opportunities that ensure they can live the life they want. 

A holistic approach to financial wellness programs

Financial wellness programs need to ultimately serve employees in a number of different ways. Tools like EWA are great for whatever your employee needs to feel financially secure and bring their best selves to work. 

Employee's financial health goes beyond having enough money at a specific moment, it's having the right resources and tools to be able to continue improving their situation in whatever they need, and EWA and perks at ZayZoon can help you support them on their journey.

Holistic financial and employee wellness programs allow you to build an environment that top talent wants to invest in long-term. Your employees will be able to focus on loving their work, getting creative, and creating impact, and, hopefully, will feel less stress about their financial situation.