January is Financial Wellness Month, which recognizes the importance of financial wellness and well-being. As business leaders reflect on last year and implement new business prioritizations, it’s important to also consider a workforce’s financial health. For instance, our Wages & Wellbeing study shows 54% of Americans worry multiple times a week or more about having enough money to make ends meet between paychecks. To support employees who are facing financial hardships or living paycheck-to-paycheck, employers should consider deploying targeted strategies that develop a supportive and inclusive workplace culture, offer financial benefits that truly make a difference in everyday life, and improve overall financial wellness.
Offer Financial Literacy Training
According to the Global Financial Literacy Excellence Center, adult Americans correctly answered an average of 48% of questions on their annual index survey indicating low financial literacy across the U.S. population, especially among those from historically underrepresented groups.
Employers can help to increase financial literacy within their organization with the establishment of a financial literacy training program. From navigating their company’s benefits program to setting short and long-term financial goals, an effective training program equips employees with the knowledge needed to make informed financial decisions.
Implement Modern Pay Strategies Like Earned Wage Access
Modern pay strategies are designed to meet the demands of today’s workforce, with employee financial wellness top of mind. Additionally, many are designed to cut operational costs and increase efficiency for both employers and payroll specialists.
One example is earned wage access (EWA), a benefit that allows employees to access their earned wages before payday, anytime they need them. One of the most notable benefits of EWA is an increase in employee financial wellness and security, with 50% of American workers being likely to avoid major financial pitfalls if their employer offered EWA.
On the other side of the coin, EWA provides numerous benefits for organizations as a whole:
- Increased Productivity: A decrease in employee financial stress can increase company-wide employee productivity, engagement, and attendance.
Increased Job Market Competitiveness: EWA can also give an employer an advantage in attracting top talent, as 79% of working Americans report being more interested in a job that offers EWA. As employee expectations continue to rise, companies that do not offer EWA will be at a disadvantage compared to those that do.
- Decreased Employee Turnover: Another proven benefit of EWA is an increase in employee retention, with 56% of working Americans reporting that they would stay at their current job longer if it offered EWA.
- Streamlined Operations: EWA reduces the need for paper checks and manual wage advances, streamlining payroll operations for employers. By eliminating the tedious administrative work associated with traditional payroll management, employers can also save time and cut costs.
- As we near the end of Financial Wellness Month, employers should seize the opportunity to reevaluate their commitment to the financial wellness of their workforce. Investing in a comprehensive financial literacy training program or offering financial wellness benefits like EWA can empower employees to make informed financial decisions and reduce their financial stress.
The improvement of financial wellness of employees not only enhances their lives, but also contributes to an organization’s overall performance and, ultimately, its bottom line.
Want to see an earned wage access program in action? Learn how Church’s Chicken used Instant Pay to address financial stress.