For retention, reducing financial stress is key. Financial stress is a major but often overlooked factor to employee turnover. So, financial wellness initiatives can be invaluable retention tools.
Turnover is a major problem for employers — and it’s getting worse. In June alone, 3.9 million U.S. workers quit their jobs. More alarming, 65 percent of employees surveyed by PwC in August of 2021 stated they were looking for a new job.
In addition to the challenges of losing top talent, turnover is highly disruptive due to the time and money it takes to train new hires. The Society for Human Resource Management (SHRM) estimates that the average replacement cost of a salaried employee is six to nine months’ salary. That means that an employee earning $60,000 per year costs around $30,000 to $45,000 to replace.
So, how can you increase employee retention? One answer is financial wellness.
What is employee financial wellness?
Stress is a top reason employees leave their jobs, according to recent research by iHire, and financial stress is an under-recognized part of that picture. So, putting your efforts towards reducing financial stress can help keep people on at your company longer. Per the American Psychological Association’s 2020 Stress in America report, 63 percent of adults say their finances are a significant source of stress, a major jump from the previous year, when just 46 percent said the same.
The COVID-19 pandemic has increased financial stress — 62 percent of those in households that experienced job or wage loss since the outbreak began told Pew Research Center that the economic impact of the pandemic will make it harder for them to achieve their financial goals. COVID’s ongoing impact on the economy and the world at large make it all the more important to start thinking about how your company can commit to employees’ financial wellness now.
Incorporating financial wellness into employee benefits’ packages is not only desired — 87% of employees want help when it comes to personal finance, according to PwC — but also a proven solution. Financial wellness programs improve overall health and well-being, leading to lower stress and lower healthcare costs. Plus, employees say it keeps them sharper at work: 6 in 10 say they are more committed to their employer and more productive when employers demonstrate a commitment to their financial wellness, Prudential found last year.
Finding financial wellness solutions that work
According to research conducted by FinFit between 2018 and 2020, when organizations offered financial wellness assistance, there was a nearly 20 percent increase in employee retention across salaried and hourly employees, $1,855 annual turnover cost-savings per employee and nearly $2 million saved annually for every 1,000 employees.
When it comes to actually implementing financial wellness benefits for your employees, programs like Best Money Moves can help. Best Money Moves uses artificial intelligence to power a mobile-first platform that measures employee financial stress, then dials it down with a unique content-mapping system that helps solve your employees’ pain points.
Our triggers and alerts system, as well as budgeting tools, personal finance resources and more, guide employees to make smarter financial decisions and reduce their overall stress, which in turn, can help improve your company’s retention rates.
If you want to learn more about how Best Money Moves can bring financial wellness to your company, download our whitepapers.