This post shows why financial wellness programs are good for business
75% of employees are more likely to stay with their employer because of their benefits program. Despite this powerful sentiment, it’s still important for HR leaders to prove the ROI of their benefits. Doing so allows you to demonstrate the impact of your investment, measure the effectiveness of your program, and secure a bigger budget in the future. But to effectively track the returns, you have to know where to look. To help, we’ll review 3 unexpected ways that your financial wellness program can deliver ROI.
Below are three areas where you might not expect your financial wellness program to have an impact—but can actually deliver significant ROI to your organization.
A study of a Fortune 100 company found that the introduction of a financial wellness program led to lower healthcare costs. In fact, the average employer healthcare costs associated with employees who used the organization’s financial wellness program decreased by 4.5%, while the costs associated with employees who never used the program increased by 19.4%. This equated to a cost savings of $271.50 per employee.While financial wellness and health may seem unrelated, this correlation makes a lot of sense. When asked what causes them the most stress, employees cite financial matters more than any other life stressors combined. And being stressed about money has been shown to have a direct impact on health—negatively affecting everything from blood pressure levels to sleep quality.
Financial stress spills over into the workplace. That’s why 50% of employees report being distracted by finances at work. And it costs employers an estimated $250 billion per year in lost productivity and absenteeism.Thankfully, another unexpected way that financial wellness programs deliver ROI is by reducing absenteeism. Improving the financial wellness of employees has been found to decrease the average number of hours of unplanned absences. Specifically, the average number of hours of unplanned absences fell from 13.73 hours to 10.35 hours—potentially saving employers millions of dollars in unplanned absences.
Financial wellness programs can even help your employees maximize their other benefits. How? Having the support of a holistic financial wellness program equips your employees with the knowledge, tools, and resources they need to better utilize their existing benefits.For instance, retirement savings are critical to financial well-being. Unfortunately, 42% of employees say it’s likely they’ll need to use money in a retirement account for expenses other than retirement—ultimately delaying their retirement. But a study found that, as employees’ overall financial wellness levels increased, so did contribution rates to employer-sponsored retirement plans.Similarly, the study also found that improved financial wellness led to increased contributions to flexible spending accounts (FSAs) and health savings accounts (HSAs). The average combined contribution to a flexible spending and health savings account increased from $905.55 to $1,137.50.
While it’s important to look at quantitative data when calculating ROI, we encourage companies to take a more holistic approach. Just as important as measuring cost savings is asking questions like:
Even though the responses to these types of questions may be difficult to quantify, they matter. There’s a reason why one-third of employees rank a financial wellness benefit with access to unbiased coaches as the employer benefit they’d most like to see added at their organization, and why the usage of employee financial wellness programs is at an all-time high. And sometimes, you have to look beyond the numbers to know if you’re effectively addressing the needs of your workforce.We hope this post inspired new ways to think about calculating the ROI of your financial wellness program. If you’re curious to learn more about Origin’s financial wellness platform, book a demo with one of our team members.