How Employers Can Support Employees Beyond Salaries

Salaries, an essential part of compensation, don’t always cover the full range of financial needs employees face. These challenges can leave workers feeling stressed, which can impact their focus, morale, and performance. However, Financial wellness strategies help employees manage the growing financial pressures of today, such as rising costs, unexpected bills, and planning for the future.

It also provides a comprehensive solution, bridging the gap between paychecks and peace of mind. Employers can reduce financial stress, improve workplace morale, and build a more productive, loyal workforce by offering practical tools and resources.

Why Salaries Alone Are Not Enough

Relying solely on salaries to support employees’ financial well-being is no longer sufficient. While a paycheck covers the basics, it often falls short when emergencies strike or long-term goals come into play. 3 in 5 U.S. workers surveyed say they live paycheck to paycheck with little or no savings to cushion unexpected expenses. This reality is a major driver of workplace stress and disengagement.

A PwC Financial Wellness Survey revealed that 54% of employees identify finances as their most significant source of stress. This stress spills over into the workplace, affecting performance and productivity. Employees preoccupied with financial concerns are more likely to be distracted, less engaged, and even absent from work. For employers, the costs are steep—lost productivity, increased turnover, and higher healthcare expenditures.

Offering financial wellness programs can effectively address these gaps. Providing resources beyond salaries can help employers support their workforce’s holistic financial needs and create a more stable work environment.

The Impact of Financial Stress on the Workplace

Financial stress is both a personal issue and a workplace problem. When employees are worried about money, it affects every aspect of their performance:

• Distraction: PwC found that employees dealing with financial stress are five times more likely to be distracted at work. This distraction leads to mistakes, missed deadlines, and decreased productivity.
• Absenteeism: Stressed employees are more likely to call in sick or miss workdays. Healthcare expenditures are nearly 50% higher for workers experiencing financial stress, and these costs often include stress-induced illnesses.
• Turnover: Financially stressed employees are 2.3 times more likely to seek new employment. High turnover disrupts workflows and burdens employers with recruitment and training expenses.
• Burnout: Businesses that fail to address financial stress risk creating a cycle of disengagement and burnout, which can ultimately affect their bottom line.

Effective Strategies for Financial Wellness

To effectively support employees, employers must implement targeted financial wellness strategies. Here are some practical approaches:

1. Emergency Savings Accounts (ESAs)

Emergency Savings Accounts give employees a safety net for unexpected expenses. According to BlackRock’s Read on Retirement survey, 64% of employees say they’d save more for retirement if they had access to an emergency savings fund. Sunny Day Fund offers a workplace emergency savings program that automates payroll deductions, helping employees build a financial safety net.

With about 50% voluntary participation and participants saving an average of $1,700 annually, ESAs provide a crucial buffer against unexpected expenses. Employers offering such programs see up to a 25% increase in employee retention and fewer early retirement account withdrawals.

2. Budgeting Tools and Apps

Providing access to budgeting tools helps employees track their income and expenses, plan for upcoming costs, and avoid unnecessary debt. Many employers partner with financial technology platforms to offer these resources as part of their benefits package.

3. Financial Literacy Programs

Education is key to financial wellness. Financial literacy programs teach employees how to budget, save, and invest effectively. Topics like retirement planning, debt management, and emergency preparedness can empower workers to make informed financial decisions.

4. Incentivized Savings Plans

Employer-matching contributions to savings accounts or offering bonuses for hitting savings milestones can encourage participation. These incentives signal to employees that their financial security is a shared priority.

Integrating these strategies helps employers create a strong support system that addresses immediate financial needs and long-term goals.

Salaries and Savings: A Complementary Approach

One common misconception is that offering financial wellness programs detracts from other benefits like retirement savings plans. In reality, they work hand in hand. Emergency savings accounts, for example, reduce the likelihood of employees withdrawing from their 401(k)s for immediate needs and are more likely to contribute consistently.

This complementary approach ensures that employees can tackle both short-term emergencies and long-term goals, leading to better financial stability and greater engagement with employer-provided benefits.

Benefits of Financial Wellness for Employers

Investing in financial wellness is a win for businesses, too. Here’s how:

• Reduced turnover: Bank of America found that 84% of employers believe financial wellness tools boost retention. Employees who feel financially stable are less likely to seek opportunities elsewhere.
• Improved productivity: Employees free from financial distractions are more focused and engaged at work. PwC’s report highlights the link between financial security and workplace performance.
• Lower healthcare costs: Addressing financial stress reduces stress-related health issues, absenteeism, and medical expenses. Employers who tackle financial instability save roughly $400 a year per stressed employee.
• Enhanced morale: Workers who feel supported are more optimistic and motivated, contributing to a positive workplace culture.

By offering financial wellness programs, employers create a healthier, more engaged workforce that drives long-term success.

Building an Effective Financial Wellness Program

Implementing a financial wellness program requires thoughtful planning and execution. Here are some steps to get started:

• Assess employee needs: Use surveys or focus groups to understand your workforce's specific financial challenges.
• Choose the right tools: Select solutions like ESAs, budgeting apps, or financial literacy workshops tailored to your employees’ needs.
• Communicate clearly: Educate employees about the program’s benefits and how to participate. Transparency and accessibility are crucial for high engagement.
• Measure impact: Track participation rates, employee feedback, and organizational metrics like turnover and absenteeism to gauge effectiveness and make improvements.

A well-executed financial wellness program signals to employees that their well-being matters and builds trust and loyalty.

Beyond Salaries: A Cultural Shift

Supporting employees beyond salaries requires a shift in workplace culture. Employers must prioritize holistic well-being, recognizing that financial security is as important as mental and physical health. The 2024 Voice of the Workplace Report emphasizes this connection, revealing that 65% of employees say a supportive manager improves their mental health.

When employees feel valued, they’re more likely to bring their best selves to work. Financial wellness initiatives reinforce this message, helping businesses attract and retain top talent while building a culture of care and support.

A Better Way to Support Employees

Salaries are essential but don’t address every financial challenge employees face. Sunny Day Fund’s emergency savings accounts (ESAs) offer practical tools to help employees build financial security. With features designed for real-world needs, ESAs empower employees to manage unexpected expenses and work toward long-term goals.

For employers, these programs improve productivity, reduce turnover, and foster a more engaged workforce. Partnering with Sunny Day Fund helps businesses create stronger teams and a workplace where employees feel confident and supported. It’s a win for everyone.

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