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Why Employers Are Embracing ‘Financial Wellness’ for Employees

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Why Employers Are Embracing ‘Financial Wellness’ for Employees

In the initial throes of the Great Recession, the nation’s 401(k)s and IRAs lost about $2.4 trillion in value during the last two quarters of 2008. According to one estimate, that loss translated to an average retirement savings loss of about 25 percent for workers who had been saving since the mid- to late-1980s.

Now approaching retirement, many of these older employees have never fully caught up.
At the other end of the spectrum were the Millennials entering the workforce during this time. As a group, these young people shouldered a record-breaking student loan burden, yet were often obliged to settle for jobs that offered cut-rate, “buyer’s market” salaries.  

Many of these younger employees have never caught up, either.

The reality for most American workers is that wages have been flat for decades. Meanwhile, the cost of nearly everything else – notably college tuition and housing – has continued to rise. Small wonder that “financial wellness” has become a staple of workplace health and well-being programs across the country.

In the 1980s, employers embraced 401(k)s to help manage the cost of employee retirement packages, which had become prohibitive. In a similar way, health and wellness programs rose in popularity to help employers manage the spiralling cost of employee healthcare packages. The theory is that a healthier workforce is happier, more productive, and requires fewer expensive medical procedures – all of which reflects positively on a company’s the bottom line.

But how “happy and healthy” can employees expect to be while losing sleep over mounting debt, an inability to save money and an uncertain financial future?

Evren Esen, research director for the Society of Human Resource Management (SHRM), said the results of a recent annual benefits survey showed roughly half of employer members now offer investment and individual retirement planning to employees. This trend is expected to continue in 2018.

“I think financial wellness is huge,” said Sylvia V. Francis, a rewards manager for Denver-based Regional Transportation District. She said this year her company began offering Dave Ramsey’s Smart Dollar program to employees who needed help paying off debt. And other companies have been experimenting with creative ways to help employees pay off student loans.

Preventure, a leader in workplace health and well-being, based in Coventry, Rhode Island, has responded to a need for financial wellness support by offering workshops and webinars on money management. Topics range from “Healthy Food Shopping on a Budget” to managing personal finances, the principles of investment, and saving for retirement.

“Helping to educate people on the basics of money management is consistent with our holistic approach to health and well-being,” said Preventure CEO Mark Correia. “Whether it’s proper nutrition, physical fitness, stress management or financial wellness, our mission is to help improve the lives of every individual we touch.”

Source: https://www.benefitnews.com/news/9-employee-benefit-trends-to-watch-in-2018