Employers take a more holistic approach to worker wellness
by Eric ReisenwitzMr. Reisenwitz is senior vice president and interim president of Group Protection at Lincoln Financial Group. Visit www.lfg.com
Companies are working hard to implement safeguarding measures, install barriers, and sanitize equipment to protect the health and safety of their employees. Having a healthy workforce is critical to a company’s success, and while many employers have provided guidance and assistance to support the physical health of their employees, it’s equally important to assess the pandemic’s impact on financial wellness.
In our current environment, many employees may be feeling heightened levels of financial stress and uncertainty, which can adversely affect productivity. Even before the ongoing and evolving COVID-19 situation, half of Americans said that financial stress had a negative impact on their health and/or their performance at work.
Research shows that employees are looking more and more to their employers for information and guidance during this uncertain period. Ensuring that employees have the right benefits and protections in place can help ease financial stress and safeguard their financial future.
Increased financial stress due to COVID-19
COVID-19 has only exacerbated the issue of financial wellness in this country. In fact, most households entered into the crisis without much of a financial cushion, with only 29% of Americans saying they were financially healthy in 2019.
Finances can be a tremendous source of stress for employees, which in turn can affect performance at the workplace. Even before to the pandemic, 58% of employees said their finances caused them stress, more than their work situation (51%), health issues (45%), or family issues (44%). This heightened financial stress has spillover effects on employees’ productivity. Nearly four in five employees (78%) who report high financial stress say that they are distracted by stress at work.
Employers have an opportunity to help reduce this stress and improve engagement by offering financial wellness benefits. Research shows that financial wellness programs through employers are welcomed by workers, although few are actually offered these programs. While eight in 10 workers would like education on how to manage competing financial priorities, only 16% of workers report being offered help with competing financial priorities.
Offering financial wellness information can also help employers attract and retain talent. Nearly three-quarters (74%) of employees say that financial wellness benefits are important for an employer to offer, while 60% of employees surveyed say they’d be more likely to stay at a job if their employer offered financial wellness benefits that help them better manage their finances.
By offering information and access to information, employers have a significant opportunity to improve employees’ financial health while also strengthening their businesses.
Ease financial stress with employee benefits
Educating employees about their benefits is even more important in the wake of COVID-19, and presents a tremendous opportunity for employers to help their employees understand how the benefits offered can provide financial peace of mind.
In this uncertain time, employees are turning to their employers at higher rates than before the pandemic for information on protection. In fact, 34% of employees report they have reached out to their employers for benefits information, and 24% of employees report that they more often look to their employers for benefits information now, as compared to the time before COVID-19.
Insurance coverages offered at the workplace, such as disability, accident or critical illness insurance, can help protect income and savings, leading to less financial stress. Without the right protections in place, an accident or illness can derail retirement savings, disrupt someone’s ability to provide for their family or drive them into additional debt.
However, education is crucial. In a recent survey, 45% of U.S. adults said they aren’t sure if short-term disability would cover someone who becomes sick with COVID-19, and 14% believe that COVID-19 would not be covered. How benefits are presented and communicated is equally important. Among employees who do not use every benefit offered, clear explanations of benefits and easy access are the two biggest factors that would make them more likely to use the benefit.
The need for additional education on benefits affects all generations of the workforce. Close to half (48%) of millennials reported having a personal question they would love to get answered about their benefits, but don’t know who to ask. And when we look at Generation Z, the youngest generation in the workforce, even fewer understand the benefits available to them — only 13% say they understand short-term disability insurance.
Offering more dynamic education on workplace benefits could help move the needle on these numbers, and provide employees with peace of mind when it comes to unforeseen health issues or accidents.
Offering these benefits is an important first step, but often, in order for these products to provide the protection employees need — they have to actually enroll in the benefits first. Adoption rates of some ancillary benefits still remain low — only 35 percent of people say they have accident insurance, 23 percent have short-term disability, 22 percent have long-term disability and just 16 percent have critical illness insurance.
Our current environment provides a unique opportunity for employers to increase adoption of these financial protections and showcase the efforts they have made to protect their employees’ financial future, leading to a healthier, more productive and more engaged workforce.