Key Takeaways
- Financially stressed employees can kill your company’s bottom line.
- Financial wellness programs have proven to save company’s money by addressing their employees’ concerns.
- College savings is an often overlooked, yet integral part of a company’s overall financial wellness strategy.
Paying for a child’s college is the #1 household financial concern among parents. But many wonder, what affect does financial stress have on an employee base and what does it mean for an employer’s bottom line? Research shows that not only do employees want financial wellness in the workplace (86% of employees said it was important for their employers to offer financial wellness programs), but the effect it can have is absolutely staggering.[1]
Financial wellness’ big impact
Financial wellness [in the workplace] is an initiative designed to provide employees with information on how to manage their financial resources effectively. And why exactly would a company roll out an initiative like that? Well, to put it simply, financially stressed-out workers aren’t good for business. They are less productive, less engaged and thus, a drag on an employer’s bottom-line.
81% of employees admit financial problems have affected their absenteeism and productivity.[2] And employers are seeing that play out. 78% of employers state employees who worry about finances are far less productive.[3] So it would seem fairly obvious that employers have a vested interest in helping their employees handle their financial concerns.
An overlooked concern
According to GALLUP, the top 3 concerns of parents are paying for college, retirement and serious medical bills respectively. So how are employers helping their employees to cope with these problems?
The chart below shows what percent of parents are concerned with those mentioned above, the solution typically offered by an employer to help their employees with it, and what percentage of employers are offering those solutions.
This chart shows the top 3 concerns of parents, the normal employer solution to that concern, and what percentage of employers offer said solution
The great disparity at the top of the chart is incredibly alarming. Not only are employees being left to fend for themselves when it comes to their top financial concern, but employers are hemorrhaging money in the form of lost productivity and engagement.
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Money left on the table
Financial wellness initiatives are supposed to help employees take control of their financial worries, yet most programs have this huge gap in their coverage. But despite this gap, most financial wellness programs have seen huge success, with employers reporting $3 in saving for every $1 spent.[4] Additionally, they have reported $5,000 in savings per year per employee by limiting personal financial distractions in the workplace.[5]
If these programs have this kind of incredible success without even addressing their parental employees’ #1 financial concern, what kind of numbers could we see if employers began implementing a college savings solution as standard practice? It’s time to find out.
Changing the course of history
And of course, improving a company’s bottom line is of great concern and should always be a consideration when implementing a financial wellness program. But companies have a chance to make a far greater impact than dollars and cents. So great in fact, that it could change the course of American history.
On a grand scale, we have a very serious student debt problem, a $1.2 trillion dollar problem that only seems to be getting bigger. Employers have a chance to change the very course of America by deflating this student debt bubble. Implementing college savings as part of an overall financial wellness initiative can put up a fight against America’s biggest impending financial crisis. All that’s needed is widespread adoption.
It’s time to make employer-sponsored college savings plans as commonplace as 401(k) plans.
About Gradvisor
Gradvisor is an SEC registered RIA that is revolutionizing college savings with its state of the art 529 college investment digital investment platform that allows employers to include college savings plans in their benefit package. The algorithm, coupled with human advisor support, helps employees understand and maximize their college savings. The Gradvisor team has a wealth of college savings experience, with a team that spun-off from Savingforcollege.com, the 17 year leader in college savings information that provides college savings data and tools to the top leading financial institutions.
Gradvisor is headquartered in the Brickell Financial District in Miami, FL. When the team is not busy working on helping American families save for college, you can find them playing a competitive game of office foosball.
[1] BenefitsPro, Employees want financial wellness programs, privately, http://www.benefitspro.com/2015/10/12/employees-want-financial-wellness-programs-private
[2] http://www.moneylogic.com/uploads/documents/ML_PowerPoint_Jan_9_2012_2.pdf
[3] Id.
[4] Consumer Finance Protection Bureau, Financial Wellness at Work, http://files.consumerfinance.gov/f/201408_cfpb_report_financial-wellness-at-work.pdf
[5] Emerge Benefit, Financial Wellness Landscape Analysis, https://www.emergebenefit.com/assets/librarypdfs/Workplace-Financial-Wellness-White-Paper.pdf