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How Small Businesses Can Support The Financial Wellness Of Their Employees Without Breaking The Bank

Kathryn Tuggle  |  May 31, 2024

Are you looking to improve your employees’ financial wellness while attracting the next round of top talent? Here’s how. 

As a business owner, you want to create an environment where your employees can truly grow and prosper — not just in terms of their career success, but also personally, making strides toward their individual financial and other goals. But how, exactly, do you make that happen? 

The 2023 State of Women survey from HerMoney Media and Principal Financial Group® found that small and midsized business owners may be undervaluing the need for a strong financial wellness program. The vast majority of employees — 77% — say they feel it’s important to focus on financial health and well-being in the workplace, yet only 69% of small and midsized businesses said the same thing. Why the disconnect? Misconceptions around cost are one reason. Worries that companies have too few employees to justify a program are another. 

The reality is small and midsized business owners typically overestimate the cost of benefits, according to data from Principal Financial Group. In fact, they have estimated the cost to be as much as five times higher than it truly is.* Bottom line: A financial wellness program can be effective and affordable no matter how many people you employ. 

Financial Wellness Is The New Table Stakes 

With many large corporations now offering flexible schedules, the ability to work-from-home, “unlimited” paid leave and many other benefits, it’s become more difficult — and more important — for small business owners to attract and retain top talent. Increasingly, a benefit like a financial wellness program is no longer seen as a perk, rather, it’s now “table stakes,” explains Trisha Qualy, certified financial planner and managing Partner at Affiliated Advisors in Minneapolis. 

“I talk to a lot of small business owners who see programs like this only as an expense, but that’s extremely shortsighted. It’s actually an investment you’re making in your employees, and having these programs is a testament to how much you care,” Qualy says. “Your competition is only going to get stronger, and we are not headed in the direction where there is going to be a surplus of top talent.” 

Yes, Small Businesses Can Best Their Competition

If you have only a handful of employees, there’s a temptation to think that benefits can wait for “another time” — but that’s also a mistake, Qualy says. “Do you want to hit 50 employees one day? Well, if you do, then you need to get benefits in place immediately so you can actually grow,” she explains. 

At a small business, employees are often more like family, explains Kara Hoogensen, senior vice president, head of Workplace Benefits at Principal Financial Group. And when business owners have an intimate knowledge of exactly who they’re working with, you’re in a much better position to ensure that your benefits program is truly meeting employees’ needs. “That’s not something that a 2,000-employee group can do as effectively, which actually gives you an advantage over a big company when it comes to attracting and retaining top talent,” Hoogensen says.  

Lower Employee Stress = Better Employee Retention 

Not only do many small and midsized business owners overestimate the cost of benefits, they often underestimate the ROI. According to data from Principal Financial Group, more than 70% of business owners say their benefits have helped them attract the employees they need for their business**, Hoogensen explains. 

One big reason? When employees feel supported, they have less stress. And that reduction in stress translates into happier, more productive employees who want to stick around and grow their careers. “Logic would tell you that if I have some stressor in my personal life, I can’t just turn that off and not think about it when I’m at work,” Hoogensen details.

“I remember a colleague getting calls from debtors during the workday — it was incredibly distracting for everyone,” says Carla Adams, certified financial planner and founder at Ametrine Wealth in Lake Orion, Michigan. “Anything you can do to help get your employees on track [financially] is going to be beneficial to the company’s bottom line.” 

For Starters, Offer An Employer-Sponsored Retirement Plan 

“If you don’t already offer a retirement plan for your employees, like a 401(k), now’s the time,” Adams says.  If you do already offer one, then look to kick things up a notch by helping employees use the plan more effectively. One way to do this is by auto-enrolling new employees at a substantial contribution level of around 10% rather than the 3% many companies enroll people at. If employees opt for a lower contribution rate, implementing an auto-escalation program, where their percentage is increased annually can help — as can other “nudges” to current employees that encourage them to save more, Adams says.  

“A lot of people don’t even know how much they should be contributing. It may be time to bring in a financial advisor who will meet with people individually for an hour or so. This is often far more effective than having everyone sit through a boring seminar where they might not be comfortable asking personal questions,” Adams says. 

Another strategy? Whenever bonuses are being paid out, ask employees if they want to contribute more to their 401(k) specifically from their bonus. “Since most people are able to live off of their salaries, they’re more likely to be able to contribute more to their 401(k) during bonus time since they know it’s ‘extra’ money, and they want to take advantage of an opportunity to be responsible,” Adams says. 

Next, Find A Financial Wellness Program That Works For Your Team

Not sure where to start? Look no further than your employees — ask them what they need and want most, Hoogensen says. This is the first step in ensuring that whatever program you put in place will be used and valued. From there, chat with other business owners that you know and see what kinds of programs they have in place, what’s worked well for them, and lessons they’d suggest not repeating. You can also turn to your CPA or attorney, because while financial wellness may not be their main area of expertise, they likely have connections with expertise that can be leveraged. 

Finally, if you already have a relationship with a financial services company or an insurer, check to see if a financial wellness program might be automatically included with your current programs or offerings. “It could be that there is no additional charge, and then it’s just a matter of promoting the program and creating  awareness amongst employees,” Hoogensen says. 

To learn more about helping your employees reach their financial goals, visit

This story was sponsored by Principal Financial Group®

About Principal Financial Group®

Principal Financial Group® is a global financial company focused on improving the wealth and well-being of people and businesses. In business for more than 140 years, Principal® helps customers plan, protect, invest, and retire, while working to support the communities where they do business, and build a diverse, inclusive workforce. Learn more about Principal at


* According to a 2019 CC&G SMB Quantitative Survey from Principal.
** According to the 2024 Business Owner Insights from Principal. 

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