How people feel about their finances can have a ripple effect on every part of their lives—whether that’s their ability to prepare for a financial emergency, to save for the future, or to be truly present at work. Yet financial services institutions, benefits administrators, and employers have only recently started prioritizing these issues in the workplace.
“We believe that, for many Americans, the road to financial wellness begins at work. People see their employer as more than just a paycheck. Often, they view their employer as a trusted resource for information and guidance.”— Catherine Golladay, President, Schwab Retirement Plan Services
The terms financial wellness, financial health, and financial well-being have become more and more common in everyday benefits conversations. At its most basic level, financial wellness begins when a person takes control of their finances, understands their financial goals, and has confidence that they can reach them. No matter what you call it, providing workplace support that helps people improve their financial situations isn’t just a trend—this benefit is here to stay.
The popularity of workplace financial wellness benefits has been driven in part by employee demand—especially concerns about retirement preparedness. In fact, more than one-third of retirement plan participants surveyed say that saving enough money for a comfortable retirement is their top source of financial stress.1 But this shift has also been spurred on by greater recognition of the effects of financial stress on employee productivity and research that shows that many people lack the basic foundation to meet their financial needs. According to a recent survey of 1,000 Americans, 59% are living paycheck to paycheck, and 39% don’t have an emergency fund.2 The positive impacts of offering workplace financial wellness support extend beyond employees’ personal financial health. These benefits can also encourage employees to engage more with their core benefits, help employers attract and retain talent, and remove barriers to retirement readiness.
Financial education is essential, but it doesn’t push most people to act. Sometimes they don’t know what to do with the education they receive. Sometimes they interact with educational materials but don’t apply the principles to their lives. Financial wellness support should focus on pairing education with opportunities for people to take action. Showing employees their next best steps—and giving them ways to take those steps—can help them move forward on their paths to financial wellness.
Every financial challenge that employees face—or financial achievement they want to pursue—contributes to whether or not they reach their goals. When you meet employees where they are with personal support that helps them find and take their next best steps, you have the opportunity to make a meaningful impact in their lives.
At Schwab, financial wellness is at the core of everything we do. And it always has been. We believe that bringing integrated, actionable financial wellness support to your company can help you ensure that your employees are happy, healthy, and productive.