Workplace financial wellness programs a must for today's small business leaders

The majority of today's small business leaders agree that workplace benefits play a pivotal role in helping companies recruit and retain talent and create healthy work environments.

What's more, business leaders recognize the growing responsibility they hold for their employees' financial wellness, according to Bank of America's 10th annual Workplace Benefits Report, which examines trends in workplace benefits and wellness.

Today's employers are expected to do more than just fund matching retirement contributions, though that remains important. In fact the range of topics being addressed by workplace wellness programs has increased significantly and includes both financial and nonfinancial considerations.

Now, as professionals across Chicagoland navigate the uncertain economy stemming from the coronavirus, they're turning to their employers for support and resources across more of their financial lives than ever before. Employers are wise to take note. According to the study, employee financial wellness has a direct impact on overall happiness and productivity, and employers who include financial wellness as part of their benefits program have more focused and motivated employees.

Below are key trends from the 2020 Bank of America Workplace Benefits Report, which will assist small business leaders in crafting meaningful employee wellness programs.

• Employers feel responsibility for their employees' financial wellness.

More than 60% of employers surveyed feel extreme responsibility for their employees' financial wellness, up from just 13% in 2013. This is most visible in the area of retirement, with roughly 4 in 5 employers feeling responsible for helping employees prepare for retirement health care costs and retirement income needs. Workplace benefits programs that recognize retirement planning as one piece of a larger collection of long-term financial goals are most effective.

• Workplace support has grown, but financial wellness has declined.

Less than half of employees say they have made significant progress toward their financial goals, according to the study. Debt and rising health care costs top the list of reasons why employees aren't closer to achieving their long-term financial goals, such as owning a home or paying off student loans.

Employees are looking to their employers for help, and employers of all sizes are responding. Beyond retirement, trends suggest more companies are investing in financial wellness programs that cover planning for health care costs, saving for college, budgeting, and paying off debt.

• Women need financial wellness programs tailored to their unique financial journey.

Fewer women report feeling financially well compared to their male counterparts. Not only do women live longer, but they often make less than their male peers and may take time out of the workforce to raise a family.

What's more, women tend to focus on more short-term needs at the expense of long-term goals. For those reasons, employer-sponsored financial wellness programs should consider the unique needs of women employees as opposed to a one-size-fits-all approach.

• The generational gap is apparent in financial wellness.

In today's multigenerational workforce, employers must be mindful of what constitutes financial wellness across the generational cohorts. Generally, older employees feel more financially well than their younger counterparts, but they have vastly different goals.

Younger generations tend to be more focused on short- to medium-term goals like purchasing a home, while older generations tend to focus on long-term goals, such as saving for retirement. In short, generational gaps illustrate the need for employers to provide education and guidance covering a wide spectrum of financial needs.

• Employees crave professional guidance.

Professional advice was ranked as the most valuable employer-offered financial resource by employees surveyed, with online tools, financial skills development and retirement support following behind. Interestingly, however, employees report physical and mental aspects of wellness as greater contributors to overall well-being, underscoring the importance of a holistic approach to workplace benefit programs.

Financial wellness is an essential workplace benefit regardless of the size of the business. Employers that prioritize a comprehensive yet customized approach to workplace benefits will achieve greater productivity and employee loyalty, both of which are critical during these challenging times.

• Mike Granata is the small business market executive for Bank of America in Chicagoland.