Why Financial Wellness Programs are Becoming the Cornerstone of Employee Benefits

Health benefits used to be the gold standard — the one thing everyone expected, and anything else was just a “nice-to-have.” But today’s employees want more. They’re looking for benefits that can truly support them in their personal lives, like financial wellness platforms. 

Forward-thinking employers are stepping up, offering these tools as an innovative and empathetic way to combat rising financial stress. A 2022 Forbes survey revealed that 72% of employees are experiencing financial stress, which adversely impacts their mental and physical well-being and contributes to declining productivity, job performance and turnover.

Hourly employees are especially vulnerable to the pressures of high inflation and mounting debt, as their income often leaves little room for unexpected expenses. This financial strain has led many to look to their employers for support, driving demand for financial wellness programs as a critical addition to employee benefit plans.

According to PwC’s 2023 Employee Financial Wellness Survey, 60% of full-time employees are stressed about their finances, which is even higher than the number who were worried about finances during the height of the pandemic. The same survey found that 57% said finances are the chief source of stress in their lives.

Employers are also acutely aware of the role of financial insecurity in the workplace; employees distracted by financial woes are less productive and subject their companies to higher turnover rates.

When employers invest in financial wellness programs, they can improve employee morale, retention and engagement while fostering a culture of employee loyalty and satisfaction. As employee benefits evolve and become more personalized, employers need to look for customized financial wellness programs and solutions that support each employee wherever they are on their financial wellness journey.

Why adopt an employee wellness program?

According to PwC's 2023 Employee Financial Wellness Survey, most employees want help with their finances. Employers are responding by increasingly adopting financial wellness platforms to support their employees for compelling reasons that benefit both their workers and their organization. 

Several of those reasons include:

1. Improved employee well-being. Mental health is closely aligned with financial health, so when employees are struggling with financial issues, their mental health is affected as well. Corporate Wellness Magazine states, “Companies that prioritize the financial well-being of their employees are likely to witness higher levels of employee satisfaction, reduced stress levels, increased engagement, and a better ability to navigate unexpected financial challenges.”
   
   When employers address their employees’ financial stress by offering a financial wellness platform, they can help alleviate that stress, enabling employees to better focus on their tasks and increase their overall productivity.

2. A holistic approach to benefit offerings. Employers are realizing that a one-size-fits-all approach to benefits doesn’t work. A diverse workforce has diverse needs, so by incorporating financial wellness programs, organizations can better cater to these diverse needs and improve employee engagement and satisfaction. When employers add financial wellness to their benefits package, they recognize that supporting employees’ financial well-being can improve their overall health, leading to a healthier and more productive work environment.

3. Boost employer brand. In a highly competitive labor market, a company has to differentiate itself to come out on top. Prioritizing employee financial wellness is one way to do this, and it demonstrates that an employer really does have its employees’ best interests in mind. Employees are more likely to recommend their workplace to others if they feel their employer genuinely cares about their well-being. This positive word-of-mouth will likely attract higher-quality candidates and contribute to a stronger organizational culture.

4. Increased employee productivity, loyalty and retention. Companies that implement financial wellness platforms often see higher employee retention rates. Financial wellness programs that provide education and assistance show that employers care about their employees' well-being, fostering a loyal and engaged workforce. Employees who feel valued and supported are less likely to seek employment elsewhere, reducing organizational turnover costs.

5. Easier to attract top talent. As organizations struggle to gain a competitive edge in the job market, offering a comprehensive financial wellness program can be a key differentiator in attracting top talent. A holistic benefits package tailored to the unique needs of employees, wherever they are on their financial journey, enhances the employer brand, making the organization more appealing to potential hires.

How To Select an Employee Financial Wellness Program

Suppose you’re an employer considering offering your employees a financial wellness program. If so, here are a few of the critical components that need to be part of the program you choose:

1. Earned Wage Access (EWA) is an essential component of any financial wellness platform you’re looking to offer. EWA allows employees to access their earned wages before payday to cover unexpected expenses, without relying on payday loans or credit cards. It can also save employees the fees they typically incur with late payments and bank overdraft fees.
   
   A 2023 survey conducted by Payroll.org found that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. An EWA provider should offer this benefit at no cost to employees to avoid placing any additional financial burden on employees who already have trouble making ends meet.
   
   EWA empowers employees by giving them more control over their earnings and reducing their reliance on high-interest loans. It should be entirely free to employees; otherwise, the fees associated with accessing their pay add to an employee’s already heavy financial burden. 

2. Comprehensive financial education is essential to helping employees make more informed financial decisions, resulting in a healthier, more financially secure workforce. You can help employees better understand how to manage their finances by delivering education on saving, budgeting and retirement planning through workshops, webinars and interactive tools.
   
   Chime Workplace™ offers fee-free access to earned wages for employers and their employees. It also provides a suite of enterprise financial wellness tools to help employees achieve a higher level of financial security.

3. Credit-building tools can help your employees who are struggling with poor credit. Providing them access to tools that help build or repair credit can be life-changing. Some programs even offer services that report monthly rent or utility payments to credit bureaus, providing an additional way that employees may improve their credit scores over time. With a healthier credit score, employees may receive better loan rates and other financial products, helping to reduce their financial stress.

4. Personalized financial assessments that provide detailed individual advice and financial planning information for each employee. By providing targeted support, this feature enhances the effectiveness of your financial wellness program. It also helps employees feel that you are genuinely invested in their personal well-being and want to help them achieve a more financially secure future.

5. Integration with your existing HR system ensures the successful implementation of your financial wellness platform. This integration helps maximize employee participation and ensures that the platform is easily accessible to all employees within your organization.

6. Goal-oriented rewards and progress tracking motivate higher employee engagement by incorporating goal-oriented rewards and incentives for meeting specific milestones. Rewards for meeting goals can include bonuses, experiences, contributions to retirement accounts, stock purchases or other financial products, creating a situation that benefits employees and employers.
   
   One of the solutions included in Chime Workplace is Salt, which allows your employees to save a non-cash asset for future redemption based on goals they set for themselves. Employees accumulate Salt simply by working, providing them with a means to save for something they want but maybe can’t afford on their own. It helps employees accumulate future value for their work today and increases their loyalty to you as their employer.

7. Debt management and emergency relief are needed to assist many employees who have heavy debt burdens, including credit card balances and student loans. Offering tools to help with debt consolidation, refinancing, and repayment options can give employees the much-needed relief they need to reduce their ongoing financial stress. 
   
   Student loan debt affects many employees in today’s workforce, so including student debt management in your financial wellness platform can benefit many younger employees.

A safety net for employers and employees

When you invest in an employee financial wellness platform, you provide a safety net to your employees who face financial stress that affects their health, engagement and productivity. Adopting a comprehensive financial wellness program fosters a supportive work environment and can help employees reduce their financial burdens. Offering resources like EWA, credit-building tools, personalized assessments and goal-oriented rewards shows that you care about your employees’ financial security, which results in increased employee loyalty and job satisfaction.

Financial wellness programs are essential for employers in a competitive labor market. They help attract top talent and retain a motivated, productive workforce. Employees who feel financially secure are more engaged and productive in their jobs, contributing to your organization's overall success. By supporting financial well-being, you invest in the future stability and growth of your business and your employees.

Chime Workplace offers a tailored and dynamic financial wellness platform that helps your employees achieve greater financial security wherever they are on their unique financial journey. Chime’s integrated platform and range of products enable each employee to continuously make progress along their personal financial journey, regardless of where they start. 

Isn’t it time to give your employees the benefit they really need—a robust financial wellness program that will ease their financial insecurity and help them move forward with greater confidence?