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Financial Wellness Programs Foster a Thriving Workforce

A report based on Metlife Australia Employee Benefit Trends Study 2019

What is financial wellness?

Financial wellness is the state of being in strong financial health so that individuals can successfully manage day-to-day finances, protect against unplanned expenses and financial shocks, and plan and save for future milestones.

How does financial stress impact work life?

Employees have always brought personal stress into the office. But as work and life continue to blend, employees’ lives outside of work – and the stress that comes with them – make more of an impact on their work life than ever before.

Employers have a vested interest in helping employees manage their personal stress, ensuring that it does not affect their ability to thrive in the workplace.

Across generations, life-stages, and socioeconomic statuses, the majority of Australian employees agree that personal finances is their number one source of stress.

High cost of living, stagnant income growth and high levels of debt are all contributing to financial stress as is retirement savings (or lack thereof).

This anxiety can lead to distraction at work, absenteeism, and high turnover – challenges that can have a significant financial impact on a business’ bottom line.

According to a recent PwC report1, Australian workplaces lose approximately $11 billion per year to employee stress and mental health issues. This comprises $4.7 billion in absenteeism, $6.1 billion in presenteeism and $146 million in compensation claims.

Over half of employees feel stressed while they are working

There is also a disconnect between employees’ relatively strong perceptions of their finances and their actual financial wellness. This can result in even more stress when they face unexpected financial pressures and fall short of meeting their financial goals.

Increasing employee productivity and reducing employee stress were two of the top objectives for employers when it comes to their benefit offerings. Yet employers appear to be failing to connect productivity and stress factors with personal finances.

Our research shows that providing employees with benefits designed to better manage their work and personal lives, as well as benefits that reduced the company’s benefits cost took priority over tailoring employee benefits and providing financial education.

Considering the impact financial stress has on business productivity, and employee engagement and wellbeing, financial wellness should become a top focus for employers, but currently employers have many other competing priorities.

However, employers place far less importance on financial wellness programs compared to other employee benefits strategies. Only 52% said they thought offering financial education to help employees become financially secure was very or extremely important.

To help employees protect their families and plan for their short- and long-term goals, many employers offer a range of benefits such as life insurance (e.g. death, Total and Permanent Disability (TPD), income protection (IP), and Trauma), additional superannuation contributions, cash payments / bonus schemes, and additional paid leave.

Yet, financial stress remains for employees. Employers are now recognising they should help employees holistically connect the dots between these benefit offerings, so they understand how to use them to improve their financial wellness.

Financial wellness programs are designed specifically to address this emerging need. 

The most successful financial wellness programs are holistic, or all-inclusive, tying together retirement and employee benefits with guidance and resources.

By taking a holistic approach, these programs can not only maximise the impact of employers’ investments in their benefits programs, but to help employees meet their short- and long-term financial goals, too.

But despite these advantages, many employers haven’t been able to gain traction in offering these programs.

This is understandable, given that there are so many financial wellness solutions available — and it can be challenging to determine which programs meet employees’ needs, create meaningful improvements, and drive clear business value.

Still, it is a missed opportunity for employers. Financial wellness programs are not only in high demand, but, when delivered effectively, can serve as a differentiator in employee satisfaction, productivity, and loyalty.

At MetLife, we are committed to supporting financial wellness in the workplace. We leverage insight across the business internationally, including 17 years of research on employee benefits in the US.

In the fifth iteration of our Australian Employee Benefit Trends Study, we have uncovered insights that can help employers understand the positive impact financial wellness programs can have and how employers can develop best-in-class programs to meet their employees’ needs.

Employers report their top objectives include...

98%
Increasing employee productivity
97%
Retaining employees
96%
Reducing employee stress
95%
Meeting needs of employees across all life stages and diversity spectrum
94%
Increasing employee mental wellbeing
94%
Increasing employee engagement
94%
Controlling employee work-related injury and illness costs
93%
Attracting employees
92%
Increasing employee likelihood to promote their organisation to others as a great place to work
89%
Helping employees make better financial decisions
88%
Increasing employee financial literacy and wellness
88%
Helping employees achieve successful retirement outcomes
86%
Ensuring employees are financially prepared to retire
84%
Attracting recent graduate entering the workforce
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Employees' financial perceptions don't really match

We explore the paradox between employee's perceptions about their financial situation and the reality of their financial wellness.

Read now
Employee Benefits Trends Study 2019

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Learn more about this year's research or find out how MetLife can support your business, call 1300 555 625.

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