A Guide to Financial Wellness in the Workplace

February 4, 2025

SEB Marketing Team

Financial wellness is integral to employee wellbeing, directly influencing productivity, engagement, and overall performance. When employees face financial stress, it can lead to decreased focus, higher absenteeism, and even physical and mental health challenges. Let’s explore the importance of financial wellness and provide practical strategies for employers to support their employees’ financial wellbeing.

Why Financial Health Matters in the Workplace

Financial stress doesn’t stay confined to an employee’s personal life—it spills over into the workplace and can lead to decreased productivity, increased absenteeism, and higher healthcare costs. Here are some ways financial stress can manifest:

• Less productive: Financial stress can create worry which leads to distraction about bills and debt which detracts from focusing on work—being physically present but not mentally engaged, also known as presenteeism.
• Absenteeism: Stress caused by financial worries can also manifest as health issues which increases the likelihood of sick days.
• Higher Health Care Costs: Employees struggling with financial stress are more likely to experience health problems, leading to increased healthcare utilization and costs for both the employee and the employer.

By supporting employees’ financial wellness, organizations can foster a healthier, more engaged, and productive workforce.

Common Financial Challenges Facing Employees

Of course, which financial stressors might affect each person individually depends on the stage of life and personal needs. Still, many employees face significant financial challenges such as:

• Debt Management: Whether it is credit card debt, student loans, or other financial burdens, high levels of debt weigh heavily on employees and create stress and anxiety.
• Emergency Expenses: Many employees lack an emergency fund, leaving them vulnerable to unexpected costs like house repairs, medical bills or car repairs.
• Saving for Retirement: Everyone knows saving for retirement is necessary, but balancing immediate financial needs with long-term savings goals can be a daunting task, especially for younger workers or those with families.
• Budgeting and Financial Literacy: Employees may lack the knowledge or resources to create effective budgets or make informed financial decisions.

Understanding these pain points is the first step for employers to provide meaningful support because they can create a ripple effect on the overall business performance. Financially secure employees are often more engaged, focused, and dedicated to their roles.

How Employers Can Support Financial Wellness

Employers can improve their workforce’s financial health by implementing targeted financial wellness initiatives. Here are some actionable strategies:

Provide Financial Education Resources: Equip employees with the tools and knowledge to make informed financial decisions. Consider hosting workshops or webinars on topics like budgeting, debt management, and retirement planning. Access to learn-at-your-own-pace online tools and literacy programs can also be beneficial. Also, provide easy-to-read guides and resources to help employees understand their financial options.

Offer Employee Assistance Programs (EAPs) with Financial Counseling: Many EAPs now include financial counseling as part of their offerings to help employees manage their individual needs. Through these programs, employees can receive one-on-one support from certified financial counselors, and personalized action plans for managing debt, creating savings, or tackling other financial challenges. This tailored guidance empowers them to take control of their financial future.

Implement Retirement Planning Programs: Help employees prepare for their futures and create long-term financial security by providing access to robust retirement planning options, such as RRSP matching contributions to encourage savings, organizing educational sessions to help maximize retirement benefits, and providing tools or resources to assist in estimating their retirement needs and developing a plan.

Encourage the Creation of Emergency Funds: An emergency fund is a crucial safety net that can help employees manage unexpected expenses without falling into debt. Employers can encourage employees to build an emergency fund by offering savings programs, matching contributions, or providing financial incentives for reaching savings goals.

Financial wellness is a vital component and essential to creating a supportive and productive environment. Employers can promote financial wellness by offering tools like financial counseling, retirement planning programs, and resources for emergency funds. These steps not only support employees but also contribute to a healthier, more engaged workforce. Investing in employees’ financial wellbeing not only benefits the individual but also contributes to the success and sustainability of the organization.