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According to Tom Rath and Jim Harter, leaders of workplace well-being research for Gallup, financial wellness is defined as “effectively managing your economic life.”

This simple concept encompasses many factors, including:

  • Keeping spending within one’s means

  • Being financially prepared for emergencies

  • Having access to the information and tools necessary to make good financial decisions

  • Having a plan for the future

The underlying concept of financial wellness is financial security, one of the most common goals reported by employees across all sectors. However, very few report having access to the kinds of financial services and benefits that they feel would be the most helpful. This sentiment is echoed by employers in a 2014 report from the Center for Financial Services Innovation.

Most of their financial health offerings consist of limited employee assistance programs designed for crisis situations, comprising just a small part of an employee’s total health benefits package. In many cases, these programs aren’t included in the benefits package at all. What’s missing is a more comprehensive approach to financial fitness, one that helps employees build lasting financial strength and stability, leading to a more solid organization.

A Holistic Approach

Employer-based financial wellness is often seen as an addendum to other benefits, but the financial health of employees should be viewed through the comprehensive lens of other health and wellness programs that employers offer. These services don’t just take care of employeeswhen they’re sick, but also work to prevent them from getting sick in the first place with fitness, smoking cessation, diet and lifestyle programs. Financial wellness programs should work in the same way, offering holistic support and advice to employees so they can meet short-term needs while working toward long-range goals.

Each employee has different financial priorities and obligations, so a successful, holistic wellness program requires solutions tailored to an employee’s unique circumstances. This starts with digital engagement, interviews and examination of employees’ pay and benefits records to establish a complete picture of their finances. The aim is to understand employees’ goals when it comes to paying taxes, purchasing a home, establishing and maintaining good credit, healthcare, emergency preparedness, education costs, paying down debt, saving for retirement and other parts of their financial life.

The second part of a holistic approach to financial wellness is understanding the concepts of good financial health and having the right tools to act on that knowledge. This means employees not only need education, but also the opportunity to put this information into action. For some employees, this simply means using software to keep track of financial goals. For others, having a financial coach or adviser to review their finances and offer suggestions does more to keep them accountable and engaged with their goals.

Benefits of Employer-Based Financial Wellness

The value of a good wellness solution is felt across the organization, from employees to management and other decision makers.

For Employees

A high level of financial wellness gives employees the ability to make better, more informed decisions and manage a successful, long- term strategy. When employees have acomprehensive understanding of their finances, they can create effective strategies for dividing, and potentially automating, their paychecks between bill, savings, investments and other commitments. Employees will be equipped with the skills, knowledge, and tools necessary to develop and support successful financial outcomes.

In fact, studies show that people who regularly plan ahead for emergencies and other irregular expenses are 10 times more likely to be considered financially healthy than those who don’t, regardless of income or other demographics. Experts point to this as evidence that positive financial habits have more impact on a household’s financial well-being than an increase in income. A report by the Consumer Financial Protection Bureau found that a lack of disposable income is one of the most commonly cited reasons that employees give for not participating in retirement plans and other employer-provided financial benefits. However, if employees can make more effective use of their current funds, they may find the income to put toward their future.

For Employers

Employers feel the effects of their staff’s financial health as well. Employees in stressful financial circumstances are less productive and less likely to remain at their jobs. Pat Milligan, Senior Partner at Mercer, found that 22 percent of employees report missing at least one day of work to handle financial problems, 15 percent reported spending at least 20 hours a month working on personal financial tasks at work, and a full 20 percent have had to resign from jobs due to financial stress. And according to the Journal of Occupational and Environmental Medicine, one day of employee absence costs businesses an average of $348 in lost productivity. From that angle, ensuring that workers are free from personal financial stressors can boost a company’s profitability.

Unfortunately, many companies, including those polled for the report conducted by the Center for Financial Services Innovation, don’t realize their need for a broader approach to their employees’ financial fitness until workers become reliant on emergency EAP services, increasing the costs of these programs and jeopardizing the company’s ability to keep them going. Financial wellness can help companies fight against unnecessary expenditures due to absenteeism, lost productivity and benefit cost overruns, allowing businesses to expand their benefit options to include:

  • Programs that enhance money management skills and help employees create and build assets

  • Newsletters and other periodic publications

  • Investment, retirement, college, emergency and health care planning seminars

  • Debt- and credit-related programs

A more extensive list of benefits can also help businesses attract and retain top-notch staff, as employees who are financially content are more likely to stay with the company for the long haul.

The road to financial health is an ongoing journey. Once financial wellness has been achieved, both employees and employers have a role to play in its continued progress. Establishing and cultivating financial fitness requires individual persistence, as well as a supportive environment with accessible, high-quality financial services. This will not only allow companies to realize benefits such as increased loyalty, higher productivity, and lower costs, but enable employees to meet the challenge of balancing responsible living today with wise planning for tomorrow.


[1] Jennifer Robison, The Business Case for Wellbeing, Gallup Business Journal

[2] The Effects of Financial Education in the Workplace: Evidence from a Survey of Employers

[3] Financial Wellness at Work, Consumer Financial Protection Bureau

[4] Pat Milligan, Driving Financial Well-being: A New Multidimensional Approach for Organizations, Mercer

[5] Aliza Gutman, Understanding and Improving Consumer Financial Health in America, Center for Financial Services Innovation

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