Every year, nearly $90 billion is invested in employee workplace wellness programs, according to Financial Health Network’s “Wellbeing in the Workplace” report. Yet, just 30% of employees are financially healthy – the lowest level seen since 2019. On top of that, the World Health Organization estimates that employee financial stress still costs employers around the globe $1 trillion annually.
So why haven’t all of the investments in employee financial wellness moved the needle? As the Financial Health Network points out, most financial wellbeing strategies skip over the most critical aspect of financial health: helping employees develop a solid financial foundation.
Here’s a closer look at why a financial health strategy that doesn’t address financial instability won’t deliver results for employees or employers, and how focusing on benefits that support all three financial wellbeing pillars can be transformative.
What are the three pillars of financial wellbeing?
Aon defines financial wellbeing across three key pillars:
1. Financial security for today
Helping employees manage everyday money needs – like housing and transportation costs, bills, and groceries – especially in the face of inflation and rising costs.
2. Financial safety net
Providing tools that help employees handle financial shocks, including access to emergency money, safe paycheck-linked loans, emergency savings, and other local and government resources that offer relief.
3. Financial security for the future
Supporting long-term goals like retirement and homeownership, so employees can plan for tomorrow with confidence.
Unfortunately, most employers only support the second or third pillars – often through workplace emergency savings accounts, one-size-fits-all financial education, retirement plans, CFP-led financial planning, or niche point solutions. Because the critical gaps that drive high employee financial stress, turnover, healthcare costs, disengagement, and retirement plan leakage remain, neither employees nor employers see a meaningful impact from their financial wellness benefits.
Why the foundational pillar of financial wellbeing can’t be ignored
Regardless of income, only 30% of employees are financially healthy and in the third pillar of financial wellbeing. Without adequate support, it’s unlikely that the remaining 70% of employees will progress beyond the first or second pilars.
Worse still, if they have a financial shock, face hardship or a crisis situation, or have a major life event that can derail a person’s finances, such as divorce, job loss, or illness while they are in the first or second financial wellbeing pillar, they could slide backward.
These practical examples demonstrate why a strategy that doesn’t address the financial needs of today won’t work:
- A budgeting tool or financial plan can’t help an employee who doesn’t have enough money to cover rent, has a low credit score, and is drowning in debt.
- An workplace emergency savings program isn’t enough to solve the financial challenges of an employee struggling to afford basic needs. Even if their employer contributes funds to the savings account, the employees’ day-to-day financial challenges haven’t been addressed. Until that happens, the employee will remain stuck in the first or second pillar.
- A retirement plan doesn’t help the 70% of employees who are living paycheck to paycheck. Those who do have retirement funds due to auto-enrollment or past contributions will likely tap into the account at some point to cover bills or money emergencies, despite that it harms their longer-term financial security.
Financial Care: Support all financial wellbeing pillars with one benefit
Supporting employee financial wellbeing effectively shouldn’t require that benefits leaders manage even more benefits. That’s why Brightside Financial Care supports the three pillars of financial wellbeing in one place, through personalized, human-led care that meets employees exactly where they are, a robust solutions platform that includes paycheck-linked options, and integration with and navigation to all other employer benefits, including a hardship fund.
These are just some of the ways Brightside supports the various pillars of employee financial wellbeing:
Financial security for today
- Brightside Financial Assistants help employees connect with free resources that offset costs of essential needs, such as housing, transportation, utilities, food, and childcare.
- A free Brightside Spending Account makes it easy for employees to track and manage their money. Employees who use direct deposit with the account can access their paycheck before payday.
- Brightside Financial Assistants provide personalized support to help employees navigate crises such as eviction or homelessness, help them prioritize bills if they fear falling behind, navigate past due bills, find money, and manage all types of debt, including student loans.
Financial safety net
- Employees who have Brightside have access to affordable and safe sources of emergency cash and loans, even with a low credit score.
- Employees can open a free paycheck-linked Brightside Savings Account that makes it easy to save as little as $1 automatically from each paycheck. Employees also earn a competitive interest on funds in the account to help their money grow faster.
- Brightside Financial Assistants help employees navigate open enrollment to ensure their benefits selections reflect their needs and lifestyle, and help them find and use other employer benefits including hardship funds, legal aid, and other financial services.
Financial security for the future
- Brightside Financial Assistants help employees find ways to contribute to their 401(k), understand options for retirement planning, investing, continuing education, and a 401(k) match or stock options.
- Brightside Financial Assistants help employees improve credit scores, pay off debt, and build hope and confidence to work toward and reach longer-term goals. They also help them navigate homeownership programs, estate planning, insurance, student loan repayment, and more.
Rethinking your approach to employee financial wellness doesn’t have to require investing more than you already are in benefits; it simply requires one financial health benefit that addresses all three pillars of employees’ financial wellbeing. That’s Brightside Financial Care.
Click here to learn more about Brightside or schedule a demo.
