M1 Blog > Insights > What every company must know about their employees’ financial health

What every company must know about their employees’ financial health

Financial Health

I’ve been an HR professional now for over 8 years, including my current job as the Director of Talent here at M1 Finance. Most of the companies I’ve worked with have embraced at least some basic responsibility regarding their employees’ financial future – typically in the form of a 401(k) program.

This is an important benefit for employees, but I would contend there is far more companies can and should do to improve their staff’s financial health. I’m not talking merely about a feel-good benefit but rather one that acts as an important investment in the business. In fact, what many employers don’t realize is how directly their employees’ financial wellness can affect their bottom line. Consider this: PWC’s 2017 Employee Wellness Survey found that 46% of workers spend three or more hours at work every week thinking about or handling financial issues.

Here, a lack of financial wellness directly relates to a decrease in productivity, and it stands to reason, then, that helping employees achieve financial wellness can help improve not only their happiness but also the company’s profitability.

Another benefit? As unemployment continues to fall and skilled employees have their pick of jobs, employers will need to find ways to attract and retain top talent. Helping to pay gym memberships or cell phone bills is nice, but they treat the symptoms of financial wellness rather than the underlying causes. By offering employees the resources they need to achieve and maintain financial wellness, they’ll be more likely to stay with you – and less likely to leave because someone else offers a slightly higher salary.

Engaging Employees for Improved Financial Health

Before I go into what a financial wellness program could look like, let me clarify the M1 stance on what it takes to be financially healthy. Financial Wellness is the comfort and confidence that you’re on the path to meet your financial goals. Further, we believe the only way to reach that level of financial wellness is by being engaged with and understand your personal finances.

To illustrate my point – and since I love being outdoors – let’s talk gardening:

To understand the importance of engagement, think of your finances like a garden: you’ve got some zucchini, some tomatoes, a few types of flowers, maybe even a couple apple trees in the yard. If you just plant a bunch of seeds and hope for the best come harvest time, you’re in for a disappointing haul. Sure, you’ll probably get a few apples, but probably not the robust crop you were hoping for.

That’s because gardens take maintenance. You have to weed, water, fertilize, watch out for pests and molds, put up fences to keep out deer, and so on. And you can’t just use a one-size-fits-all approach, either: you have to know something about each plant to diagnose problems and find solutions.

Now consider this: Standard & Poor’s 2015 Global Financial Literacy Survey found that only 57 percent of Americans are financially illiterate. It’s no wonder that the PWC study I mentioned earlier found that 52 percent of us are stressed out about our finances, as we are all naturally overwhelmed by what we don’t understand.

And it’s easy to see how our ignorance can lead to inaction. From what I’ve seen, people tend to justify avoiding their financial issues by telling themselves one of two things:

  1. Personal finance is too big for me to tackle, so I won’t even try.
  2. I don’t have enough money to do anything right now, so there’s no point in even trying.

These narratives suggest that personal finance is unmanageable and unsolvable. And they set the stage for serious problems in the event of an unexpected expense, sudden illness, job loss, or other financial emergency.

Financial Wellness in the Workplace: How to Get Started

There’s no single way to establish a successful financial wellness program in your office. Depending on available resources and the challenges your employees face, you might consider offering employee discounts to financial education courses, hosting learning lunches, incentivizing signups for financial programs, and more.

Specifically, many employers are finding success by offering help with:

Student Loans: The average 2016 graduate left school with more than $37,000 in student debt. While you may not be able to put money toward paying down that debt, you can make available financial counseling services that include strategies for refinancing loans at a lower rate or even setting up a budget and payment plan.

Retirement Investing: Many companies offer 401(k) programs, but few provide employees with guidance on how to allocate their funds. Making valuable insights like this available can-do wonders for your employees’ peace of mind.

Independent Investment Options: M1 Finance is an independent investing platform designed to help people become engaged managers of their financial success. We work with employers to offer our platform at no cost to the company in order to provide a discount for employees, so they can become better at putting their money to work over the long term. Making investment options like this easily available is a great first step toward engaging employees in their financial wellness.

Debt Refinancing: Whether it’s from medical care, a mortgage, or credit cards, debt can hang over people like a dark cloud. Strategies for refinancing should be available from any financial wellness program.

If you’re not sure where to start, consider conducting an anonymous survey to ask whether employees would be interested in learning more about any of the above.

One final thought about financial wellness: the goal here is not to get all your employees debt-free or help them become super wealthy. Rather, companies should focus their financial wellness programs on empowering their employees with the tools, resources, and knowledge they need to confidently tackle financial challenges for a lifetime.

Manage your money with M1

Invest, borrow, and spend on one intuitive platform. Customize your strategies, automate the big picture, and let The Finance Super App®️ take care of the day-to-day. M1 gives total control for your wealth today and tomorrow.

Example of the M1 Finance pie displaying how slices are divided
More About
People sitting and working at tables in a busy office with text that reads "Weekly Wrap Up, market recaps every Friday"
Insights May. 13, 2022 The US financial system’s top 4 vulnerabilities

How are you spending the only Friday the 13th of the year? We’re mirroring the markets mood by sharing the Fed’s Financial Stability Report and listening to “Superstition” on repeat.  Today’s edition also covers:  […]

Photo of a person's hands over a balcony
Insights May. 11, 2022 How M1 thinks about market volatility and market corrections

After multiple days of stock declines, even the most disciplined long-term investors get concerned. We want to take a moment to share how we think about downturns and volatility at M1. For […]

Insights May. 10, 2022 Interest rates will rise. Here’s how the Fed decided

Everyone has an interest in interest rates. So, to keep things interesting, we’re discussing how these rates actually work and why the Federal Reserve decided to raise them last week. We’re also […]

Check the background of M1 Finance LLC on FINRA's BrokerCheck

By using this website, you accept our Terms of Use and Privacy Policy and acknowledge receipt of all disclosures in our Disclosure Library. All agreements are available in our Agreement Library. M1 relies on information from various sources believed to be reliable, including clients and third parties, but cannot guarantee the accuracy and completeness of that information.

M1 refers to M1 Holdings Inc., and its affiliates. M1 Holdings is a technology company offering a range of financial products and services through its wholly-owned, separate but affiliated operating subsidiaries, M1 Finance LLC and M1 Spend LLC.

M1 Plus is an annual membership that confers benefits for products and services offered by M1 Finance LLC and M1 Spend LLC.

All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future performance. Using M1 Borrow’s margin account can add to these risks, and you should learn more before borrowing. Nothing in this informational site is an offer, solicitation of an offer, or advice to buy or sell any security and you are encouraged to consult your personal investment, legal, or tax advisors.

Brokerage products and services are not FDIC insured, no bank guarantee, and may lose value. Brokerage products and services are offered by M1 Finance LLC, an SEC registered broker-dealer, Member FINRA / SIPC.

M1 is not a bank. M1 Spend checking accounts furnished by Lincoln Savings Bank, Member FDIC. M1 Visa® Debit Card is issued by Lincoln Savings Bank, Member FDIC.

Credit Card not available for US Territory Residents. Review Cardholder Agreement and Rewards Terms for important information about the Owner’s Rewards Card by M1. The Owner’s Rewards Card by M1 is Powered by Deserve and issued by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.

200 N LaSalle St., Ste. 800 Chicago, IL 60601

© Copyright 2021 M1 Holdings Inc.