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There’s a shift happening in corporate America.
The coronavirus pandemic, which resulted in mass layoffs and reduced salaries and work hours, has left millions of people financially stressed. Employers are starting to respond.
“The role of employers has really evolved,” said Julia Lamm, a New York-based workforce strategy partner at global accounting and consulting firm PwC. “You have to take care of your employees holistically.
“Financial wellness is a part of that.”
In fact, finances are the top cause of employee stress, more than job, health, and relationship stress combined, according to the 2021 PwC Employee Financial Wellness Survey, released this week. Sixty-three percent of employees polled said their financial stress has increased since the start of the pandemic. PwC surveyed 1,600 full-time employed U.S. adults in January 2021.
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“If they are distracted by all these stressors at home, whether sick family members or financial problems, that is impacting their productivity, their ability to be present at work and to do their jobs,” Lamm said.
After the Covid-19 shutdown hit, financial wellness programs were more frequently offered by employers. A November 2020 report by PwC found that 66% of respondents were providing financial literacy programs, up 12% from 2019. Specifically, financial coaching and behavioral management was offered by 59% of respondents, up 9% from last year, and financial advice was offered by 44%, an increase of 10% over the prior year.
To be sure, financial wellness programs have been around for several years, but have primarily focused on retirement savings and 401(k) plans. Now companies are starting to look beyond retirement planning.
“What employees are asking for is assistance with budgeting, emergency savings, debt management and financial planning programs,” said Krystal Barker, head of financial wellness at Morgan Stanley at Work. The New York firm works with companies on their financial wellness programs and serves 4.9 million participants.
She likened the sole focus on retirement to baking a cake, but only giving your employees the flour.
“If you only build a program around retirement readiness, it’s like leaving out a key ingredient in your recipe,” Barker said.
There are different components to a financial wellness program, including educational seminars offered to employees and personalized coaching and advice.
What employees are asking for is assistance with budgeting, emergency savings, debt management and financial planning programs.
Krystal Barker
Head of financial wellness at Morgan Stanley at Work
Yet each company should listen to their employees and customize a program that suits their needs, said Lamm. In addition to basic financial principles, employers have also helped with identity theft, paying employees’ student loans and paying for advanced degrees.
Another big component of any program is the work culture, Lamm noted.
More than 50% of financially stressed employees are embarrassed to ask for help with their finances, the PwC Employee Financial Wellness Survey found. Employers should have managers encourage employees to take advantage of the offerings.
“It would reduce the stigma,” she said.
Financial wellness programs can also be tailored to meet diverse segments of the workforce, said Morgan Stanley’s Barker.
