What’s the Difference Between Financial Wellness Programs, Benefits, and Perks
Financial wellness is more than just a buzzword. It’s a necessity. Businesses across industries recognize that employees’ financial well-being directly impacts productivity, satisfaction, and retention. Companies are deciding how to best support employees and what looks most attractive to new talent: a financial wellness program, benefits, or perks.
Each of these approaches plays a distinct role in fostering financial stability and confidence, but understanding their differences is crucial for choosing the right one. Here, we’ll delve into each type and explore how businesses can determine which type of solution fits their needs and resources.
1. Financial Wellness Programs
What are Financial Wellness Programs?
Financial wellness programs are comprehensive programs designed to help employees develop financial literacy and money management skills.
These programs generally include educational content, tools, coaching, and interactive resources that guide employees toward setting and achieving financial goals. They aim to instill good financial habits and help employees address both immediate and long-term financial challenges.
Key Characteristics of Financial Wellness Programs:
- Structure and Continuity: Programs often follow a set curriculum that builds on prior knowledge.
- Education and Resources: Programs are designed around fundamental financial literacy topics such as budgeting, investing, retirement planning, and debt management.
- Personalized Guidance: High-quality programs may offer one-on-one coaching or access to financial experts.
A good program uses structured, goal-focused modules to help employees build lasting good financial habits. This program should go beyond surface-level solutions to create measurable outcomes.
2. Financial Wellness Benefits
What are Financial Wellness Benefits?
Financial wellness benefits are specific, long-term offerings a company provides to improve employees’ financial security. Unlike programs that may require active engagement, benefits are usually designed to supplement an employee’s existing finances and future planning with low or no input needed from the employee. Examples include retirement contributions matching, emergency savings plans, student loan repayment assistance, or discounts on financial services.
Key Characteristics of Financial Wellness Benefits:
- Long-Term Value: Benefits often focus on financial security and future planning, such as matching 401(k) contributions or establishing savings accounts.
- Low Engagement: Typically, benefits require minimal participation. Employees might set up contributions initially, but benefits like employer-funded retirement matching largely operate on their own.
- Support for Financial Goals: These benefits often align with employees’ personal financial milestones, providing a foundation for stability rather than offering step-by-step financial education.
Companies that invest in benefits often find them particularly valuable for retention and loyalty, as they provide employees with a safety net and peace of mind, and empower them to achieve financial goals.
A business may choose benefits when it has the resources to offer ongoing support for financial wellness without requiring employees to engage actively with programs. Benefits are especially effective for companies with larger workforces where personalization is challenging, as benefits work passively in the background.
3. Financial Wellness Perks
What are Financial Wellness Perks?
Financial wellness perks are smaller, often one-time incentives or services designed to offer quick, short-term financial relief or support. These perks are usually smaller in scale compared to benefits or programs and include things like paid financial wellness days, cash bonuses for paying off debt, discounts on budgeting tools, or access to financial apps.
Key Characteristics of Financial Wellness Perks:
- Immediate Value: Perks tend to focus on immediate or short-term financial assistance.
- Low Commitment: Perks are typically optional and easy to access without ongoing engagement or planning.
- Complementary to Benefits and Programs: They are often used as supplements rather than core offerings, adding value without extensive resources.
Perks can be ideal for smaller companies or those with limited budgets, as they don’t require the same investment as full-scale programs or benefits. They also work well as a recruitment tool, showing prospective employees that financial wellness is valued within the company culture, even if resources are not available for more robust offerings.
How Can Businesses Determine Which Solution is Right for Them?
Choosing between financial wellness programs, benefits, and perks depends on various factors, including company size, employee demographics, and budget. Here are some factors to consider:
- Company Size and Employee Needs
- Small Companies (1-50 Employees): Smaller businesses might find that perks or targeted wellness benefits provide the most value. Financial wellness perks, like access to budgeting tools or financial literacy workshops, are affordable and meaningful for small teams.
- Mid-Sized Companies (50-500 Employees): Companies with larger teams may benefit from structured programs that offer both breadth and depth. Programs that can cater to a range of financial education levels and needs should be considered. Mid-sized companies might also add selective financial wellness benefits that support employees’ long-term planning.
- Large Companies (500+ Employees): At scale, programs or benefits that run independently and provide personalized support for employees are often ideal. Robust wellness benefits like 401(k) matching, emergency savings accounts, and regular financial education sessions can cater to diverse needs across a large workforce.
- Budget and Resources
- High Budget: Companies with more substantial budgets can combine programs, benefits, and perks for a holistic approach. Offering a financial wellness program alongside financial wellness benefits (such as retirement matching) provides both educational and financial security. Supplementing with perks can address short-term needs.
- Moderate Budget: For companies with moderate budgets, a structured program alone can offer significant value, particularly one that adapts to various financial skill levels and challenges.
- Low Budget: For companies with limited funds, financial wellness perks might be the best way to add value without a significant investment. Free access to financial wellness apps or hosting short workshops on key topics could be highly impactful on a low budget.
- Employee Demographics and Financial Literacy
- Employee demographics play a major role in determining the level of financial wellness support required. Younger employees might need education around debt management and budgeting, while older employees may prioritize retirement planning. Programs or a mix of features that allow for customizations and can be adapted to suit diverse employee needs across different stages of life may be ideal.
Knowing When to Implement a Financial Wellness Solution
Deciding when to implement a financial wellness solution can depend on key signs within your workforce. Here are a few indicators:
- High Turnover Rates: A lack of financial stability can be a major stressor that leads employees to seek higher-paying opportunities. Offering financial wellness support can improve job satisfaction and retention.
- Employee Requests: If employees express interest in financial wellness support or seem stressed about money, it’s a clear sign they’d value access to the right resources.
- Productivity and Absenteeism Issues: Financial stress can contribute to distraction, lower productivity, and increased absenteeism. If these issues are rising, a structured program, benefit, or perk could make a measurable difference.
WISE Financial Fitness
The WISE Financial Fitness program is a strong example of a perk with financial wellness program educational content. It’s especially great for small businesses that have low to average wage earners who are worried about immediate financial challenges.
It contains curricula to increase financial literacy, but also access to the WISE Pocket of Money app. The app makes it easy to manage money better with cash flow planning and forecasting.
The cash flow forecast tool shows them how expenses and income affect their current cash balance after each transaction. They can forecast their cash spend and make key decisions to avoid trouble or find money to save or invest.
For companies ready to invest in employees’ financial well-being but unsure about how to start, WISE Financial Fitness offers a clear path with measurable outcomes.
It’s adaptable to various business sizes and can be a valuable addition to any comprehensive financial wellness strategy, especially for small and mid-sized organizations looking for a program that can provide financial literacy and management tools but isn’t exorbitant for their budget.
The choice between financial wellness programs, benefits, and perks depends on your business’ specific needs, goals, and resources. Perks are a great starting point and supplement to established financial wellness programs.
Benefits and programs provide a foundation for long-term financial wellness goals and are more costly.
WISE Financial Fitness is an excellent option for businesses aiming to invest in their employees’ financial knowledge, resilience, and confidence, helping create a workplace where everyone has the tools to succeed.
