Why Financial Wellness Needs to Be Part of Your Wellness Plan

by Roxanna Coldiron

In recent years, wellness programs have become an important benefit for employers to offer their employees. Health care costs for employers continue to rise as Americans suffer from both age-related and chronic diseases, and society has also become more health conscious with a push toward healthy eating and exercise. Reducing the cost of health care required a focus on prevention: lowering risk of diseases and health-related issues due to high blood pressure, heart disease and obesity. Employers took note and now approximately half of U.S. employers offer wellness programs as part of their benefits packages, according to the 2013 RAND Health “Workplace Wellness Programs Study” from the U.S. Department of Labor and the U.S. Department of Health and Human Services.

One aspect of wellness tends to be overlooked by wellness initiatives and that is providing an additional focus on financial wellness. According to a 2012 Society for Human Resource Management survey, 61 percent of human resources professionals reported causing some impact on employee work performance as the result of financial stress. Worrying about money can have a major effect on your employees, causing them to be absent from work or decreasing their focus and their productivity while at work.

Financial stress can have a direct impact on employer health care costs. According to Ron Z. Goetzel, Xiaofei Pei, et al. for Health Affairs 31 (2012) report “Ten Modifiable Health Risk Factors Are Linked To More Than One-Fifth of Employer-Employee Health Care Spending,” stressed out employees cost $413 more per year in health care costs than employees that were not at high risk for stress. Financial stress can cause headaches, stomachaches, fatigue, insomnia and more --all of which can lower your employee’s ability to function in life and at work. You can save an estimated $413 per employee by helping your employees lower their stress levels, including stress caused by financial concerns.

Think about this scenario. You hired a 24-year-old employee who holds a master’s and a bachelor’s degree, recently relocated from another state and just got married. Your new employee has a student loan debt of nearly $55,000 and additional monthly bills that average over $2,000/month. Sometimes that means one bill goes unpaid until the next month, and the financial worry continues to escalate. Over time, your employee’s performance begins to drop and so does the amount of money you’d have been able to make when you first hired that employee, who used to have a stellar performance track record. Money weighs heavily on your new employee’s mind. That employee isn’t alone.

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