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There is a shift in American businesses.
The coronavirus pandemic, which resulted in mass layoffs and reduced salaries and working hours, has financially stressed millions of people. Employers are starting to respond.
“The role of employers has really evolved,” said Julia Lamm, a New York-based human resources strategy partner at global accounting and consulting firm PwC. “You have to take care of your employees holistically.
“Financial wellbeing is part of it.”
According to the PwC Employee Financial Wellness Survey 2021 released this week, finance is the leading cause of employee stress, more than work, health, and relationship stress combined. 63 percent of employees surveyed said that their financial burden has increased since the pandemic began. PwC surveyed 1,600 full-time US adults in January 2021.
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“When they’re distracted from all of these home stressors, whether it’s sick family members or financial problems, it affects their productivity, their ability to be present at work and get their jobs done,” Lamm said.
After the Covid-19 shutdown, financial wellness programs began to appear more frequently from employers. A November 2020 report by PwC found that 66% of respondents offered financial literacy programs, up 12% from 2019. Specifically, 59% of respondents offered financial coaching and behavioral management, up 9% year over year, and financial advice offered from 44 %, an increase of 10% over the previous year.
While financial wellness programs have been around for several years, they mainly focus on retirement planning and 401 (k) plans. Now companies are starting to look beyond retirement planning.
“Employees are asking for assistance with budgeting, emergency saving, debt management and financial planning,” said Krystal Barker, director of financial wellness at Morgan Stanley at Work. The New York firm works with companies on their financial wellness programs and serves 4.9 million subscribers.
She likened her sole focus on retirement to baking a cake, but only gave the flour to her co-workers.
“If you’re just creating a retirement readiness program, it’s like leaving out a key ingredient in your recipe,” Barker said.
A financial wellness program consists of several components, including training seminars for employees and personalized coaching and advice.
The employees ask for assistance with budgeting, emergency savings, debt management and financial planning.
Head of Financial Wellness at Morgan Stanley at Work
Still, every company should listen to their employees and tailor a program that suits their needs, Lamm said. In addition to financial tenancy, employers have also helped identity theft by paying off workers’ student loans and paying for advanced degrees.
Another important part of any program is work culture, says Lamm.
According to the PwC Employee Financial Wellness Survey, more than 50% of financially stressed employees are embarrassed to seek help with their finances. Employers should have managers who encourage employees to take advantage of the offers.
“It would reduce the stigma,” she said.
Financial wellness programs can also be tailored to different segments of the workforce, said Barker of Morgan Stanley.