Every employee enjoys perks like free beer, unlimited paid time off and catered meals, but they mean next to nothing if they are experiencing financial issues.
The burden of bills, student loans and credit card debt can distract even the best of employees, reducing productivity.
It’s for this reason that Sean Condon, a financial planner at Windgate Wealth Management, recommends investing in an employees’ financial wellness. He thinks it’s as critical a perk as there can be.
“Owners are always looking for the best new benefits,” Condon said. “Today’s employees are getting wise that it’s not all about the donuts. Now they’re asking: ‘Am I building a career here?’ They want to feel they can trust their employer.”
Companies weren’t thinking about this a few years ago, Condon said. And salary is not the only solution. Providing financial wellness tools helps employees feel secure about their future in a way that an increased salary doesn’t.
“Often we see companies get into a cycle, where you give someone a raise and they just spend it,” Condon said. “Then next year, guess what? They need another one.” Financial wellness tools can help employees make the most of what they earn.
It adds up to more trust between the employee and employer and a less distracted workforce. In the age of job hopping, it may provide the edge a company needs to retain talent.
Windgate Wealth recently launched a new website dedicated to financial wellness, or what they call Fi-Care. Here are three ways to help your employees improve their financial health.
1. Educate your employees
The most important tool for an employee’s financial wellness is education. It’s a great idea to offer programs like a matching 401K and opportunities to set goals and plans. But if employees don’t understand it, it won’t matter. For that reason, Condon said it’s critical to invest time in educating employees on what those programs actually provide, or work with a professional willing to educate the staff.
“If you’re letting your employees save through a retirement 401K plan, or providing them a match, those are great benefits,” Condon said. “But when you pair a financial wellness program with that, you’re going to increase its effectiveness.”
2. Encourage employees to invest early in retirement
One of the best ways to ensure a secure financial future is to invest early. The younger an employee begins diverting a portion of their income into a retirement plan, the better off they will be in the future. That money can have a compound effect on future wealth.
“Investing early and often is one of the most powerful ways of building wealth because returns can compound over time,” Condon said.
And the best way to encourage an employee to do that is to provide a financial planner who can help people understand and commit to those investments.
3. Help them develop a goal-based plan
Saving for the future isn’t easy. Whether its impulse buys like that new 60-inch TV or medical emergencies, it can be easy to lose track of your long-term goals. A financial planner can help employees determine what they actually value and stay on track to accomplish those goals, Condon said. They help employees make financial decisions to reach those benchmarks and hold themselves accountable.
“Through a process of little steps, you can make a big change toward a faraway goal,” Condon said.
But the key is that planning is a process, he said. It changes with the person, adjusting for raises, having a baby or saving for a downpayment on a condo. Ultimately, the financial plan relieves some of the burdens of making difficult financial choices from employees, allowing them to focus more on work.