A global pandemic revealed the undercurrent of personal financial mismanagement among large portions of the population. Job layoffs and other financial strains showed once again that there are millions of people who do not have a firm grip on their finances. Thus, companies are looking at ways that they may offer ways to help their employees to engage with their personal financial wellness.
Recognizing the Tie Between Mental Health and Finances
There is a direct link between one’s mental health and one’s ability to manage personal finances appropriately. When people feel tired, burned out, or disengaged with their work, then they are far less likely to keep tabs on their personal finances. Unfortunately, a lot of people have reported that these are some of the emotions that they are feeling right now. MetLife reported that those who expressed difficulty balancing their work and the rest of their life said that they felt the following:
- Tired (50%)
- Stressed (50%)
- Burned Out (43%)
- Discouraged (34%)
- Depressed (28%)
This is serious. It means that employers should help those employees strike the correct work-life balance for the right state of mind. An employee who is tired, stressed, burned out, and more cannot work at the full capacity that they otherwise would. Not only does this imperil the employee’s own finances, but it likely makes it harder for them to do their work.
How to Prepare for the Future When the Present Is So Scary
Short-term thinking is a killer when it comes to personal finances. It is easy to imagine things like impulse buying and other short-term pleasures having an impact on one’s finances. But it is more than just that. Those who are heavily concerned with the present have a lot of difficulty focusing on their own future. They have to worry about just getting through the day.
One way to persuade employees to better their financial wellness is to consider using a virtual benefits solution. This is the modern-day answer to getting employees to enroll for available benefits.
Tango Health details how many companies have begun to move towards virtual benefits enrollment long before the COVID-19 virus hit the United States:
While some companies have been moving toward virtual open enrollments for a few years, this year is the true test of resources, planning, and execution due to the impact of COVID-19 on America’s worker. There are many unknowns around how workplaces will function this fall, with fears of a second surge of infections, as well as companies seriously reviewing their work-from-home strategies.
With COVID-19, it is more likely that employers will move towards virtual benefits enrollment. It’s easier to sign up for the benefits online, and employers love to offer an easy way to make benefits accessible – both medical and financial wellness.
Many of the benefits of investing in a 401(k) as an example can be explained to anyone through the use of a virtual solution. In fact, some charts and other convincing information that make setting aside money right now so exciting is exactly the information that can be easily expressed through a virtual solution.
Using Nudges to Make It Happen
The future of employee engagement with their personal finances is all about the successful use of nudges to gain the desired behavior from an employee. Small tweaks to the way that a system works can bring a lot of people into the fold to do the right thing. The famed investment firm Charles Schwab has an article detailing the massive difference in participation rates in investment programs offered by employers based on simple “opt-in/opt-out” features:
Opt-in countries such as Denmark, the U.K. and Germany all had participation rates below 18%. In contrast, opt-out countries such as Austria, Belgium, France, Hungary, and Poland had participation rates of 98% or above.
Just using opt-in helps push more people to do the right thing for their financial wellness. Thus, companies may want to consider putting in opt-out solutions to help their employees make the right choices.
Let Benefits Zone Help
Benefits Zone is a virtual employee engagement solution that centralizes benefits information. Give your employees the information they need on financial wellness benefits and resources. Benefits Zone not only houses plan brochures and rate sheets, it can also house more engaging items. Things like videos, images, or charts that help employees better understand benefits and financial wellness strategies. Thus, it may now be time to consider applying nudges to help make things easier for everyone. Contact us to learn more.