How Financial Counseling Improves Employee Wellbeing

by | Mar 17, 2021 | HR and Culture

Home » How Financial Counseling Improves Employee Wellbeing

As we sail past the one-year milestone of the pandemic shutdown, it’s easy to see why employees remain stressed. While a vaccine rollout and national reopening plans compete with an uncertain future and a sputtering economy, employees can rely on one source of hope: they don’t have to face the crisis alone.

We’ve written extensively about 2020’s impact on employee mental health. Even though the situation looked dire back in July, new data from a 2020 Financial Stress Survey suggests the number of employees reporting high levels of financial stress has doubled. The good news? People are resilient. Employees are more receptive to getting the financial assistance they need, and employers are well-positioned to help.

Through a powerful tool like an Employee Assistance Program (EAP), you can help employees grasp the complete range of support you provide, including financial relief. 

Let’s dive into why financial counseling initiatives matter and how they improve employee financial wellness. 

What exactly is financial counseling?

Financial counseling can bolster an employee’s financial wellbeing through a combination of education, one-on-one coaching with a financial counselor, money management tools, and ongoing support for all financial topics in every stage of life. Other components also include: 

  • Debt management services – help employees manage repayment of various lines of credit or loans. This service explicitly targets debt types like student loans, mortgages, and credit card debt, among others. The most common service is debt counseling.
  • Savings programs – intended to help employees meet short- or long-term financial goals through savings or investment accounts. According to Mission: Money, the workplace is the ideal setting for an employee to save because it’s where income generates and where existing mechanisms (think direct deposit) enable individuals to save and invest in a straightforward and automated way.
  • Student loan counseling – experts help borrowers determine the best path for repayment based on their unique financial situation.
  • Short-term loans or accrued wage advances – make cash or credit available through the workplace. These tools provide employees with temporary relief and allow for a lower monthly payment over an extended period.

However, we know that EAP utilization is low, and employee perception doesn’t always match reality. Employees may not be aware that an overlooked EAP service like financial counseling is available through their benefits.

Helping a workforce in crisis

According to a PwC survey, full-time employees are unprepared for an extended economic recession or short-term cash needs. The study found 38% of all full-time employed Millennials, Gen Xers, and Baby Boomers have less than $1,000 saved to deal with unexpected expenses. The pandemic created a slew of new financial hardships, but it also heightened existing ones.

Financial stress can negatively impact employee productivity and mental health. And with work-life and homelife blurring together, employees’ needs and wants have evolved.

It’s important to note that although employers are not the cause of the financial stress, they are in a prime position to help. Offering a holistic financial wellness program can:

  • Bolster employee engagement and retention – a happy employee is a productive and motivated employee. By providing services that empower people to reach their financial goals and achieve stability, employers will find it easier to create and maintain a balanced and positive work culture.
  • Boost financial literacy – to be fiscally healthy, establishing a solid foundation of financial basics is one place to start. Resources such as financial counseling can educate employees about the value of budgets, responsible debt, etc. Information is power. By becoming financially literate, they become better equipped to address money management issues and alleviate their anxiety.
  • Empower employees to develop better savings habits –  when asked to choose which benefit accounts an employer could contribute to, respondents said an emergency/rainy day fund would have the greatest impact versus a 401(k) plan or unlimited PTO, according to a SoFi at Work survey. Offering such a benefit could help employees develop better habits and feel more prepared to navigate future financial hardships.

Setting up for success

COVID-19 amplified the need for financial wellness benefits. People want help but only seek guidance at key decision points or when they’re already in crisis. By providing the financial planning tools and counseling they need, you can ensure employees will feel valued, which will result in higher productivity and further stability for your business.

Related Posts

What Can Telemedicine Treat?

What Can Telemedicine Treat?

Telemedicine can treat most common medical conditions. In fact, with a few regulatory exceptions, its capabilities are mostly limited by technology. That’s good news for the future.
To Tackle Employee Healthcare Expenses, Help Them Become Better Consumers

To Tackle Employee Healthcare Expenses, Help Them Become Better Consumers

Employees may be good shoppers, but they're far less savvy when it comes to healthcare. To lower costs, we have to change the way they shop healthcare.
The Best Benefits Engagement Tool You Haven’t Used

The Best Benefits Engagement Tool You Haven’t Used

To make the most of their benefits outside of open enrollment, your employees need a more natural way to turn ...
[gravityforms id=1]
<div class='gf_browser_unknown gform_wrapper' id='gform_wrapper_1' ><form method='post' enctype='multipart/form-data' id='gform_1' action='/blog/financial-counseling-benefits/'> <div class='gform_heading'> <h3 class='gform_title'>State of the Benefits Survey eBook - 1-Col</h3> <span class='gform_description'>Testing form</span> </div> <div class='gform_body'><ul id='gform_fields_1' class='gform_fields top_label form_sublabel_below description_below'><li id='field_1_8' class='gfield gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_1_8' >First Name<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_text'><input name='input_8' id='input_1_8' type='text' value='' class='large' placeholder='First Name' aria-required="true" aria-invalid="false" /></div></li><li id='field_1_9' class='gfield gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_1_9' >Last Name<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_text'><input name='input_9' id='input_1_9' type='text' value='' class='large' placeholder='Last Name' aria-required="true" aria-invalid="false" /></div></li><li id='field_1_4' class='gfield gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_1_4' >Email<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_email'> <input name='input_4' id='input_1_4' type='text' value='' class='large' placeholder='Email' aria-required="true" aria-invalid="false" /> </div></li><li id='field_1_5' class='gfield gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_1_5' >company name<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_text'><input name='input_5' id='input_1_5' type='text' value='' class='large' placeholder='Company name' aria-required="true" aria-invalid="false" /></div></li><li id='field_1_6' class='gfield gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_1_6' >Company Size<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_select'><select name='input_6' id='input_1_6' class='large gfield_select' aria-required="true" aria-invalid="false"><option value='' selected='selected' class='gf_placeholder'>Company Size</option><option value='1-100' >1-100</option><option value='100-500' >100-500</option><option value='500-3000' >500-3000</option><option value='3000-1000' >3000-1000</option><option value='10000+' >10000+</option></select></div></li><li id='field_1_7' class='gfield gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_1_7' >Which Best Describes You?<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_select'><select name='input_7' id='input_1_7' class='large gfield_select' aria-required="true" aria-invalid="false"><option value='' selected='selected' class='gf_placeholder'>Which Best Describes You?</option><option value='Employer' >Employer</option><option value='Benefit Consultant' >Benefit Consultant</option><option value='TPA' >TPA</option><option value='PEO' >PEO</option><option value='Other' >Other</option></select></div></li> </ul></div> <div class='gform_footer top_label'> <input type='submit' id='gform_submit_button_1' class='gform_button button' value='Get Your eBook' onclick='if(window["gf_submitting_1"]){return false;} window["gf_submitting_1"]=true; ' onkeypress='if( event.keyCode == 13 ){ if(window["gf_submitting_1"]){return false;} window["gf_submitting_1"]=true; jQuery("#gform_1").trigger("submit",[true]); }' /> <input type='hidden' class='gform_hidden' name='is_submit_1' value='1' /> <input type='hidden' class='gform_hidden' name='gform_submit' value='1' /> <input type='hidden' class='gform_hidden' name='gform_unique_id' value='' /> <input type='hidden' class='gform_hidden' name='state_1' value='WyJbXSIsImFkODg5MTk3ZmY1MDIyZGVjZjEyNWI2ODk1Y2YyMGZiIl0=' /> <input type='hidden' class='gform_hidden' name='gform_target_page_number_1' id='gform_target_page_number_1' value='0' /> <input type='hidden' class='gform_hidden' name='gform_source_page_number_1' id='gform_source_page_number_1' value='1' /> <input type='hidden' name='gform_field_values' value='' /> </div> </form> </div><script type='text/javascript'> jQuery(document).bind('gform_post_render', function(event, formId, currentPage){if(formId == 1) {if(typeof Placeholders != 'undefined'){ Placeholders.enable(); }} } );jQuery(document).bind('gform_post_conditional_logic', function(event, formId, fields, isInit){} );</script><script type='text/javascript'> jQuery(document).ready(function(){jQuery(document).trigger('gform_post_render', [1, 1]) } ); </script>
[gravityforms id=9]
<div class='gf_browser_unknown gform_wrapper' id='gform_wrapper_9' ><form method='post' enctype='multipart/form-data' id='gform_9' action='/blog/financial-counseling-benefits/'> <div class='gform_heading'> <h3 class='gform_title'>10 Benefits Presentation Tips from TED Talks eBook - 2-Col (Pop-up)</h3> <span class='gform_description'></span> </div> <div class='gform_body'><ul id='gform_fields_9' class='gform_fields top_label form_sublabel_below description_below'><li id='field_9_8' class='gfield gf_left_half gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_9_8' >First Name<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_text'><input name='input_8' id='input_9_8' type='text' value='' class='large' placeholder='First Name' aria-required="true" aria-invalid="false" /></div></li><li id='field_9_9' class='gfield gf_right_half gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_9_9' >Last Name<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_text'><input name='input_9' id='input_9_9' type='text' value='' class='medium' placeholder='Last Name' aria-required="true" aria-invalid="false" /></div></li><li id='field_9_4' class='gfield gf_left_half gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_9_4' >Email<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_email'> <input name='input_4' id='input_9_4' type='text' value='' class='medium' placeholder='Email' aria-required="true" aria-invalid="false" /> </div></li><li id='field_9_5' class='gfield gf_right_half gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_9_5' >Company name<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_text'><input name='input_5' id='input_9_5' type='text' value='' class='medium' placeholder='Company name' aria-required="true" aria-invalid="false" /></div></li><li id='field_9_10' class='gfield gf_left_half gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_9_10' >Company Size<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_select'><select name='input_10' id='input_9_10' class='large gfield_select' aria-required="true" aria-invalid="false"><option value='' selected='selected' class='gf_placeholder'>Company Size</option><option value='1-100' >1-100</option><option value='100-500' >100-500</option><option value='500-3000' >500-3000</option><option value='3000-1000' >3000-1000</option><option value='10000+' >10000+</option></select></div></li><li id='field_9_7' class='gfield gf_right_half gfield_contains_required field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_9_7' >What Describes You?<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_select'><select name='input_7' id='input_9_7' class='large gfield_select' aria-required="true" aria-invalid="false"><option value='' selected='selected' class='gf_placeholder'>What Describes You?</option><option value='Employer' >Employer</option><option value='Benefit Consultant' >Benefit Consultant</option><option value='TPA' >TPA</option><option value='PEO' >PEO</option><option value='Other' >Other</option></select></div></li> </ul></div> <div class='gform_footer top_label'> <input type='submit' id='gform_submit_button_9' class='gform_button button' value='Get Your eBook' onclick='if(window["gf_submitting_9"]){return false;} window["gf_submitting_9"]=true; ' onkeypress='if( event.keyCode == 13 ){ if(window["gf_submitting_9"]){return false;} window["gf_submitting_9"]=true; jQuery("#gform_9").trigger("submit",[true]); }' /> <input type='hidden' class='gform_hidden' name='is_submit_9' value='1' /> <input type='hidden' class='gform_hidden' name='gform_submit' value='9' /> <input type='hidden' class='gform_hidden' name='gform_unique_id' value='' /> <input type='hidden' class='gform_hidden' name='state_9' value='WyJbXSIsImFkODg5MTk3ZmY1MDIyZGVjZjEyNWI2ODk1Y2YyMGZiIl0=' /> <input type='hidden' class='gform_hidden' name='gform_target_page_number_9' id='gform_target_page_number_9' value='0' /> <input type='hidden' class='gform_hidden' name='gform_source_page_number_9' id='gform_source_page_number_9' value='1' /> <input type='hidden' name='gform_field_values' value='' /> </div> </form> </div><script type='text/javascript'> jQuery(document).bind('gform_post_render', function(event, formId, currentPage){if(formId == 9) {if(typeof Placeholders != 'undefined'){ Placeholders.enable(); }} } );jQuery(document).bind('gform_post_conditional_logic', function(event, formId, fields, isInit){} );</script><script type='text/javascript'> jQuery(document).ready(function(){jQuery(document).trigger('gform_post_render', [9, 1]) } ); </script>