Do Financial Wellness Programs Take A Key Element For Granted?

How to ensure all your employees can benefit from your existing financial wellness programs

Julian Sandy, Head, Tend At Work Much research has been done into the area of financial wellness, and the debilitating effects concerns over money can have on the individual. Employees are clear that more than their work situation or their health or their family issues, it’s their finances that present them with the largest source of stress in their lives.¹

And obviously, this financial stress doesn’t just stop there, but it leaches out to impact their productivity at work, with more than one in three employees admitting that they are distracted by their worries while in the workplace.²

So quite correctly, financial wellness plans have been made available to employees in response.  And to employees at all income levels, as even higher wage earners on more than $100,000, a year aren’t immune to the stress caused by financial worries.

Information, training, and support for the employee’s day-to-day personal finance concerns are made available, as are coaching and workshops on budgeting, credit building, debt reduction, and savings planning. And for the vast majority of folk, this will be a great help and a perfect solution.  

Because they have a bank account.

Most financial wellness benefit programs assume the employee already has, or can easily gain access to, the right bank account. But if your payroll isn’t 100% direct deposit, are some of your employees falling through the cracks?  

The forgotten piece of the puzzle, the piece that makes sense of all the surrounding wellness programs already established, is the access to the banking system in the first place. The bank account. The bit that’s taken for granted.

The 2019 "Getting Paid in America" survey found that just under 93% of workers were being paid via direct deposit. That’s a really high figure and one to be celebrated until you realize that it still means that over 11 million people across the country are relying on either cash, pre-paid debit cards or for the massive majority, the good old-fashioned paper check³. That’s more than the entire population of Georgia, to put it in perspective.

There will certainly be those who are in this group by choice, but more ominously, many will be here by circumstance.  

There are a host of reasons why someone can have been turned down for something as commonplace, as accepted as a checking account. Historic activity concerning bounced checks or overdrafts can count against them, as an involuntary account closures. Applying for too many accounts within a short period of time might even be a reason for denial, as can insufficient, verifiable address details. If someone’s moved frequently and the system can’t trace or place them, they could easily be turned down.

Nowadays, for an online or mobile account, most if not all of this investigation is done automatically, with bank software systems issuing a straight pass or fail, so it’s not easy for an employee to present his or her case with context or explanations face to face with another human being. If the system gives them a ‘fail’ for whatever reason, it’s probably easier just to
remain on the outside, looking in, rather than to try and find out where to start the process of fighting against such a decision.

If an employee is outside formal finance as a result of such circumstances, then any financial wellness program put in place by their employer is going to be infinitely harder for them to follow and implement. 
 
All of which is why offering a checking account as part of an employee benefits package can be so significant for those it affects. Yet while bank accounts are as old as the hills, integrating them into benefits packages is a relatively new endeavor.  

Look to work with a banking provider whose account structures prevent unauthorized overdrafts from being run up or which remove the risk of a customer defaulting on a loan, leaving the bank exposed to loss. Lowering or removing the risk profile for a bank tends to be accompanied by an expedited acceptance process or a less demanding historic review.

Many online or mobile banks offer fee-free banking, but if those aren’t a fit for your workforce for reasons we’ve just identified, covering a small monthly fee on behalf of your employees will almost certainly pay dividends for them and for you.

Dividends such as rewards and cashback opportunities. While typical pre-paid debit cards often have a long list of fees attached to their usage, nowadays more and more debit cards linked to checking accounts are adding financial incentives which until recently used only to be available through premium credit cards. Which employee wouldn’t see that as a benefit?

Such a program brings employees into formal finance with its inherent safety and security, and its ease of access through the branch, desktop, or mobile. And with that foundation established, it allows them to take full advantage of any ancillary employer’s plans through which they can learn to plan and manage their financial futures. You’ll benefit from a more engaged workforce who are able to utilize fully your other wellness programs to reduce financial stress, generating loyalty and, as word gets around, helping you attract and retain top talent.
 
Not forgetting the additional benefit of a dramatically simplified payroll process, with direct deposit finally eliminating the cost and complexity of those paper checks.

Notes