With salaries getting simultaneously competitive and harder-to-live-on, financial wellness is a term we’re all increasingly becoming familiar with. It’s also being rolled out as part of the policy in many corporates. While it isn’t exactly a fresh concept, many are still divided on whether financial wellness programs are an additional perk or a core expectation from professionals.
The Argument for Financial Wellness Programs:
Financial stress is a problem almost all professionals experience at some point or the other. Of course, this has severe effects on one’s mental and emotional health. It becomes necessary for professionals to not just earn well, but also to know how to handle income, invest, and optimize their earnings.
They should also be well equipped to deal with their previous student loans, medical loans, etc, the options of financial counseling or advice should be made available to them, as well as other financial wellness benefits like medical insurance, financial education workshops, seminars, etc.
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Moreover, as employees dedicate their time and energy towards an organization, the organization needs to reciprocate, and take some responsibility towards its employees, other than just providing good working conditions and reasonable remunerations.
Financial wellness programs benefit professionals by making them more monetarily aware, simply put. This, in turn, adds value to the organization in the long run by increasing productivity, and consequently, even total output.
Most of all, it contributes to the creation of a superior, financially-informed world that knows how to deal with money. What’s not to love?
Of course, as a result, people are able to achieve their financial goals easier than otherwise, because of the knowledge, help, and tools they are provided with.
The importance and necessity of financial wellness programs are clearly presented in the Employers Workplace Benefits Report of Merrill Lynch, where:
- 59% of employers feel “an increased sense of responsibility towards their employee’s overall financial wellbeing.”
- 53% of employers “feel their responsibility includes providing both financial benefits plans and access to financial education and advice. In contrast, just 14% perceive their responsibility as only providing a paycheck.”
- Moreover, 68% of employers feel that these programs/benefits help them attract talent, 76% feel that it helps them retain it, and 68% say that they do it out of concern for their employee’s well-being.
- Other reasons were:
64% feel that it is part of their company’s core values
38% feel that it helps them remain competitive
39% say that it makes employees more productive
Thus we see how even employers seem to prefer and be in support of these programs. Since this report was made the numbers have only increased.
Case Against Financial Wellness Programs:
Some employers, like the 14% in the above statistics, may feel that their responsibility towards their employees ends at handing them a well-deserved pay cheque at the end of the month. This, in their view, will undoubtedly make financial wellness programs perks instead of essentials. This old-school view may not seem incorrect to them, but it is turning out to be just that.
The Reality of the Situation:
In an ideal world, the above presumption would be true. But in reality, well-qualified individuals ready for jobs tend to have near-zero financial literacy as they enter the job market. They may make reasonable amounts of money, sure. But unless they are taught and trained to optimize their finances they will never be able to reap the full benefit of their income.
This, coupled with the fact that these programs elevate productivity, reduce stress and result in a better quality of life, are the biggest reasons why financial wellness programs are essential.
The Sensible Conclusion
It would be a questionable stance, therefore, to argue that especially after the Covid 19 pandemic and the consequent lockdown (which led to severe salary cuts and job cuts), financial wellness programs offered by companies are only perks. Now, more than ever, they become essentials and a boon to employees in times where they have very few avenues to rely on.
EarlySalary understands the necessity for financial wellness programs on offer by employers, and that’s why we strive to provide organizations with all the necessary tools.