Most of today’s workspaces have millennials dominating the floors. As the demographic makes its presence felt across industries, sectors, and all facets of our culture, there’s no denying that millennials are savvy, hard-working, and have a consistent understanding of the changing trends of the world. Simultaneously though, surveys have shown that millennials are the worst at finances, and most of them are in debt.
College tuitions, student loans, and rising commodity prices are some of the most significant factors that drive the financial instability of today’s youth. Spending habits have also changed drastically over the years, leaving all age groups spending two times more than they earn.
In the current world scenario, where the pandemic has brought deaths knocking on our doorsteps, 65% of employees stated that they had no funds allotted for emergencies. So, what is coming to their rescue? The answer is employee financial wellness programs.
What are financial wellness programs?
The premise is fairly straightforward: employers give financial benefits to employees, which are not just focused on post-retirement. In other words, an all-rounded financial wellness program offers an employee investing information and knowledge to have financial independence during their careers, not just after it.
Financial wellness programs impart two skills that the employees lack: Financial Literacy and financial capability.
Financial Literacy, by definition, is having the ability to understand and use several financial skills for better financial stability – from ceasing investment opportunities to understanding how stocks, bonds, share markets, compound interests, ETFs work. Being educated about these factors determines how financially educated a person is. Several finance experts state that being finance literate will help one steer clear of financial fraud and inculcate a safer way of managing their assets.
The financial capability involves utilizing a person’s financial literacy to make money. It is the combination of skills, knowledge, and attitude to make money and make financial decisions to sustain a fast-paced financial world. Financial capability drives an individual’s success and helps one budget and plan accordingly.
Financial literacy + Financial capability = Financial wellness.
Companies that offer financial wellness keep these two factors in mind and offer their employees the right services to keep them informed and stable financially.
While the benefits differ from company to company, the bottom line is the same. Employees with a competent wellness program offered by their employer are not only happier but also have a strong relationship with the company. It’s not difficult to see how these programs also increase job satisfaction and can reduce the depression that is caused due to poor handling of money.
Apart from these, here are some of the benefits that these programs offer to their employees:
– Personal and household budgeting
– Consumer credit building
– Consumer debt reduction
– Managing Student loan repayment
– Emergency savings
– Short-term savings
– Managing Spending behaviours
– Understanding consumer attitudes
– Financial goal setting
– Financial crisis management (dealing with collections, extended unemployment, and even certificates required for filing bankruptcy)
Financial wellness programs have come to the rescue in the pandemic
A survey by Forbes has revealed that 78% of workers today have lived from paycheck to paycheck. Not more than 16% of workers have any money set aside for emergencies and post-retirement. 20% of workers have only saved for post-retirement age, and most of the employees had no sight of necessary savings and their importance.
During the pandemic, 114 million people across the world have lost their jobs. The situations have led employees worldwide to collapse into financial and mental depression, anxiety, and instability in their lives. Emergencies are out of the blue, and no healthcare plans can sustain the losses due to the coronavirus.
Employee financial wellness programs have come to the rescue today as they shed light on what is essential in the pandemic. These programs have allowed the employees to understand and invest in the right ways long before the pandemic. This has been highly effective in encouraging the employees to find the right ways to stronger finances.
Employers have offered guidance, support and have promoted planning and organizing finances even in these difficult times. This has been the most necessary support that the employees tend to need in these uncertain times.
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