Navigating employee financial wellness through insurance
Financially stressed employees are more likely to leave and twice as likely to be looking for a new job.
In the modern workplace, the call for employers to take an active role in supporting employee financial wellness is louder than ever. Surveys reveal that a significant 76% of employees believe their employers should play a part in their financial wellbeing. However, only 2 in 5 employers currently offer financial wellness programs, highlighting a crucial gap that needs to be addressed. As HR leaders explore how to better support employees in this area, increasing attention is being placed on building a holistic approach that moves beyond the traditional retirement benefits to better address all areas of financial wellbeing. One way to do this is by including the services of personal insurance brokers alongside financial advisors.
The shift in HR practices
While traditional employee benefit offerings consider an employee’s physical wellness and, more recently, mental wellness, HR leaders are increasingly recognizing the need for additional support around financial wellness.
For many years, employer financial benefit programs have focused narrowly on retirement. However, the impact of the pandemic – both on employee finances and the labor market – caused many companies to explore how a more holistic approach could improve both retention and productivity. Research shows that the financial health of employees can have a large impact on their employer. According to PwC, 56% of employees who are financially stressed spend three hours or more per week at work dealing with or thinking about issues related to their personal finances. Further, financially stressed employees are more likely to leave and twice as likely to be looking for a new job.
Fortunately, there are many ways an employer can help. Financial wellness is a broad category that includes traditional retirement benefits as well as debt and student loan repayment assistance, home buying assistance and, increasingly, personal insurance support.
As the fourth highest U.S. household expense, personal insurance has become increasingly difficult to navigate in recent years as premiums skyrocketed amidst inflation, supply chain issues persisted, repair and rebuild costs climbed and extreme weather events created more losses. Last year, some carriers increased home insurance rates as much as 23% and carriers in some states are requesting a 42% increase in 2024. While some homeowners may be tempted to offset these premium increases by reducing coverage or increasing deductibles, they would be placing themselves at increased financial risk if or when a claim must be made.
Securing adequate insurance coverage can be a strategic financial move that not only protects valuable assets like homes and cars but may also save consumers money in the long run. The right insurance coverage offers protection in case of an accident and allows individuals to free up finances that can be put towards student debt or saved for personal aspirations.
Related: Prioritize financial wellness programs: Top 5 issues employers need to focus on
By including access within a financial wellness benefits program to the services of an independent insurance broker that can provide unbiased advice and enable a choice of carriers, employers can help employees reduce risk, be better prepared for emergencies and feel more at ease when it comes to their future.
The intersection of employee expectations and employer offerings
With a growing disconnect between employee expectations and current employer offerings, HR leaders must tackle the challenge of meeting all three employee wellness needs – physical, mental and financial wellness. As the landscape of employee financial wellness continues to evolve, HR leaders play a pivotal role in shaping a workplace that prioritizes the overall wellbeing of its employees. By offering employees the services of insurance brokers, companies can continue to build a holistic approach to employee financial wellness allowing HR leaders to create a workplace that not only attracts top talent but fosters a culture of financial wellbeing and prosperity.
Todd Bevington, Managing Director at VIU by HUB and Kim Cochrane, Director of Client Services | Raffa Retirement Services, a division of HUB Retirement and Wealth Management