In many companies today, wellness initiatives are now an integral part of business processes rather than just something that is 'nice to have on the side'. In the past few years, wellness has begun to align more closely with operational objectives and is being linked to increased rates of employee retention and the long-term stability of a workforce.
Coupled with this shift in expectations from employees, it has been shown that the 'wellbeing' of the individual is increasingly affecting how well they perform within a business context. Therefore, companies now place significant emphasis upon 'financial wellbeing'.
Why Financial Wellbeing Has Become a Workplace Issue
Historically, many of the earlier attempts at employee wellness focused solely on the physical health and appearance of employees. Examples include gym reimbursement, employee challenges involving fitness, and wellness programming being offered through occasional or seasonal events. The main downside to these types of programs was that they were viewed as something separate or 'outside' of the working day. Consequently, there existed a gap between an employee's day-to-day financial pressure and their ability to interact consistently with a wellness initiative.
The Performance Cost of Financial Stress
This gap is becoming too large and is now an issue that cannot be ignored. The ongoing rise in the cost of living, coupled with escalating medical expenses and the burden of long-term debt, means that financial pressure will continue to be a significant obstacle for many employees, regardless of their industry or income level.
Typically, many employees experience the impact of financial stress at the access point of work; 56% spend three hours or more per week at work dealing with or thinking about issues related to their personal finances, therefore this form of stress shows itself through indirect means such as decreased concentration, feelings of being run-down or exhausted, lack of interest in the organization's direction or outcomes, etc.
Ultimately, over time, the accumulation of these indirect findings will contribute to an increase in absenteeism and staff turnover, resulting in large dollar amounts to employers.
From Perks to Strategy: Integrating Financial Wellness
Therefore, many businesses have begun to include financial wellness as an integral component of the overall wellbeing discussion and no longer create a divide between the workplace and personal aspect of financial management. Businesses will not be responsible for managing an employee's financial situation, but rather that an employee's financial situation has a direct impact on their performance within the company.
As employee benefits evolve to meet this need, traditional benefits such as health insurance and retirement plans will continue to be the foundation of employee benefits; however, these benefits will not typically meet the employee's everyday financial needs. This has led to many businesses introducing more flexible benefit approaches that give the employee the option of selecting how they wish to utilize wellness-related resources, rather than dictating a narrow range of options that they feel are appropriate for a given employee's needs.
Financial Tools Are Evolving Alongside Wellness
In addition, the financial products also have been evolving as well. Financial tools are now being developed that take into account actual consumer spending patterns, as opposed to traditional reward-based categories. For example, instead of providing rewards for travel and entertainment-related purchases, there are financial products that provide rewards for spending on wellness-related goods and services such as fitness, therapy, and preventative care. One of the most compelling examples of this trend was the introduction of wellness credit cards, although over time better alternatives have come up which demonstrate that financial incentives are becoming increasingly aligned with an individual's health and wellbeing choices.
The availability of these products designed for wellness is indicative of the shift in how workers will be supported to achieve wellness through access to, flexibility in use of, and lower barriers to using wellness services (i.e., being able to access and use wellness service providers without incurring additional costs). The advantages that workers may experience from access to wellness services are not limited to the worker, but will also include improved workplace performance of the company.
California’s Role as a Workplace Innovation Leader
Businesses located in California have generally been trendsetters in implementing new concepts related to workplace innovation, particularly in industries where there is intense rivalry among employers for qualified personnel. Prior to the rise of flexible work arrangements, progressive benefits, and alternative compensation structures in other areas of the United States, California businesses frequently explored these options.
Current trends in combining wellness and financial wellness (i.e., the integration of wellness and financial services) mimic many of the trends associated with flexible work and progressive benefits, especially among start-ups and industries that depend on knowledge-based workers.
Changing demographics have also contributed to these developing trends. Specifically, a greater percentage of younger workers/young professionals will assess a potential employer based on criteria beyond the salary paid by the employer, including (but not limited to) sustainability, corporate transparency, and an employer's support for mental health issues.
Financial wellbeing will also be a major consideration in these assessments because of workers' ability to assess their continued employment at a particular employer as to its long-term viability (i.e., financial stability).
Wellness as an Investment, Not an Add-On
Wellness initiatives are becoming more important to evaluate based on performance as opposed to appearance from a business perspective. Companies that view wellness as an investment in their employees’ well-being, as opposed to another "add-on" benefit, tend to see higher levels of participation and retention from their employees. Aligning wellness programs with an organization's financial situation will create a more sustainable and productive environment.
As expectations for workplaces continue to change, it seems that many organizations will further include wellness in their employee benefit packages and financial planning. Organizations that are able to incorporate these changes will be in a much better position to meet the needs of employees and create consistent operations. This is demonstrated by the increased connection between employee wellness and financial decision-making. As time goes on, we will see organizations create their workplace wellness plan based on structure and intention.
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