Three reasons it’s critical to help workers manage their finances

In the face of rising living costs and economic uncertainty, financial stability remains a significant challenge for many workers. A survey Betterment conducted of 1,000 US full-time employees found that a staggering 60% of workers face financial instability, struggling with inflation and credit card debt. This National Financial Awareness Day, employers have a unique opportunity to turn the tide.

Employers can play a pivotal role in helping workers proactively combat these financial challenges by offering robust financial wellness programs. These can include benefits such as retirement plans, budgeting and savings tools, student loan assistance, access to financial advisors, and more.

Like their employees who face many competing financial priorities, employers must balance the costs of various benefits. Here are three key reasons why employers should prioritize financial wellness programs.

1. Attracting and retaining talent

SHRM estimates that the average cost of hiring a team member is nearly $4,700. However, many employers estimate the total cost to hire a new employee can be three to four times the position’s salary. As a result, in today’s competitive job market, offering an enticing financial wellness package is more than just a perk; it’s a crucial part of a robust employment package that helps attract and retain top talent.

Along with the time, resources, and cost to hire and train new employees, it’s important to understand what benefits are most valuable to workers. With employees juggling a mix of short- and long-term financial obligations, it’s no surprise that Betterment’s survey found that 60% of workers would consider leaving their current job for one offering better financial benefits. And when considering new job opportunities, the top three financial wellness benefits that would entice workers to switch jobs are:

• A 401(k) match
• An employer-sponsored emergency fund
• A 401(k) or other retirement plan

By providing tools and guidance to help employees manage their finances, employers can position themselves to more quickly build and retain their ideal workforce.

2. Reducing financial anxiety and enhancing productivity

Financial instability and the resulting stress it causes can severely affect employees’ mental health and job performance. Betterment’s survey revealed that financial anxiety is a widespread issue, with 78% of workers experiencing it, and 44% indicating it impacts their ability to do their jobs. This is detrimental to both employees’ wellbeing and the company’s productivity and overall performance. More than half of those experiencing financial anxiety noted it makes it difficult to focus at work.

Employers can mitigate this by providing financial education and tools that empower employees to take control of their finances. Programs offering personalized financial advice, emergency savings funds, and retirement planning can significantly reduce financial stress.

By addressing these stressors, employees can better focus on their tasks, resulting in increased productivity and job satisfaction. Employers who invest in these programs demonstrate a commitment to their employees’ wellbeing, cultivating a happier and more motivated workforce.

3. Guiding young workers in financial planning

Employers can influence an employee’s financial outlook early on by proactively offering guidance and support across their employees’ full range of financial priorities. For many young workers, their first job is the gateway to managing their finances as an adult — often starting with signing up for their first retirement plan, if one is available.

Many young people struggle to balance immediate financial needs like daily expenses and student loans with long-term goals like retirement savings: 81% of Gen Z say their student debt causes them some degree of financial anxiety, and 71% believe employers should play a role in helping employees pay off their student loans.

Related: Financial wellness benefits: Employers can’t afford not to offer them now

By offering benefits like 401(k)s or even the newly minted 401(k) match on student loan payments, employers have an opportunity to not only educate but also help employees save for retirement while paying down their student loans. Financial benefits allow employees to build a secure financial foundation, and can promote loyalty and appreciation, while also helping to improve job satisfaction and retention.

As we celebrate National Financial Awareness Day, employers can reflect on the importance of financial wellness and take proactive steps to support their employees’ financial health. By offering well-rounded financial wellness programs, employers can help their employees achieve financial stability, reduce financial anxiety, and enhance overall productivity and job satisfaction. This can help lead to a more engaged and loyal workforce, ultimately benefiting both the individual and the company.

Take the next step towards a financially healthy workplace today. Collaborate with your HR and workplace experience teams to gather feedback on the financial benefits that matter most to your employees and ideal candidates, and start implementing the benefits that will best support them.

Harlyn Kassardjian, Head of Business Operations & Strategy, Betterment at Work.