3 reasons why this is financial wellbeing's watershed moment

Navigating the COVID-19 pandemic has been challenging for people in every corner of the country, at every income level. That is why supporting all aspects of wellbeing – mental, physical, social and financial – are more important and necessary than ever. Since March 2020, people’s financial wellness has been suffering.

At the height of the pandemic, unemployment rose to a high of 16% according to the government’s estimates. And, as Pew Research reports, that is a higher rise in three months than in two years during the Great Recession. Furthermore, volatility of the financial markets is causing distress over future savings, and people’s spending patterns have changed dramatically along with their daily routines.

People from all walks of life are affected by this economic downturn and uncertainty. With the pandemic continuing to wreak havoc on their lives and the economy, employers have an opportunity to step in as they reopen businesses to workers and customers.

Here are three reasons why supporting financial wellbeing will benefit the country overall:

1. People of all income levels are suffering from financial concerns and anxiety.

COVID-19 has impacted every aspect of consumers’ day-to-day lifestyle – regardless of income level. Since everyone manages their finances depending on various life factors, it is essential these unique situations are considered when thinking about financial wellness and how to support employees. This drives the message home that a one-size-fits all approach to financial wellness is not useful.

We know COVID-19 has affected racial and ethnic minorities disproportionately, and a financial wellness census conducted by Prudential found that women, people of color and younger generations are feeling the most financial stress.

However, even families that are doing all right are anxious. We do not know what is going to happen with the pandemic come winter, meaning everyone, and their jobs, are still at risk. Some people might have had to dip into their savings or 401(k)s during the uncertainty.

All these factors support why employers should offer financial programs to help people manage their budgets and feel more secure.

2. Financial wellbeing impacts total wellbeing.

Financial stress can impact all aspects of a person’s health. Higher stress levels can lead to poor eating, less exercise, infrequent visits with friends and loved ones, and other negative effects.

In fact, it has been reported that people who experience debt-related stress have higher diastolic blood pressure, and a 2008 study by the Associated Press/AOL Health found people also reported more ulcers, migraines and heart attacks.

And, if a person’s finances are suffering, that could mean making difficult choices – such as choosing to pay for necessary medical care vs. food for their family – or going into work ill so they do not miss a paycheck.

For essential workers and people in industries that require them to be face to face with hundreds of customers a day, their inability to work from home has devastated their stability. Some of these people received pay cuts or reduced hours, giving them the extra stress of providing basic needs on a budget. All this, along with keeping themselves and their families safe from COVID, is affecting their physical, social and mental health.

3. Employees depend on workplaces for support.

While essential employees continued to go to their worksites, there were still many industries in which employees were (and still are) equipped to work from home. This means employers are not seeing them regularly, like they did when the company worked in person. As a result, more organizations are sponsoring digital financial wellness programs for employees to get the support that they need given their individual situation.

Over the past few months, essential workers as well as employees working from home are seeking more financial wellness support. Popular resources include financial education programs like “how market volatility affects your retirement,” “prepare for emergencies” and “what you need to know about your 401k.” Programs may include speaking to a financial advisor, watching a video, balancing a budget or other tools.

Providing employees with financial wellness tools and resources to gain, or regain, the stability required to bring their whole selves to work will help them feel supported and confident in their finances.

Chaz Hinkle is chief people officer at Welltok.