Financial wellness is a hot topic among US employers — and for good reason. Americans are stressed about their finances, a state that affects their work life, resulting in distraction, low productivity and absenteeism and hindering their companies’ bottom lines.i In response, the number of employers offering financial wellness programs today versus four years ago has doubled.ii However, according to a recent survey of US employers by the Employee Benefit Research Institute (EBRI), many are still daunted by the challenges over:
Here we’ll share considerations that may help alleviate some of these perceived challenges.
Where to Start
The first problem lies in the term “financial wellness” itself. What exactly is financial wellness? Is it having the ability to do what you want, when you want, with your money? Or, does it mean having a high level of financial literacy? Maybe it simply means you’re fully engaged with your financial situation. No matter how you think about financial wellness, there’s no one way to define it — because it can encompass a number of different areas of an individual’s financial picture. In the EBRI survey, respondents’ notions of financial wellness ran the gamut — with education, retirement planning and financial security ranking among the top answers.iv If the idea of a financial wellness program is overwhelming to you as an employer, it’s likely that your employees are overwhelmed, too. Try narrowing the scope or focus of your program, identifying the particular outcome(s) you hope to see and sketching out the tools or tactics you believe will help drive that. Meaningful financial wellness programs aren’t created in a vacuum, so start by taking a cue from your employees.
How to Engage Employees
Just as there isn’t unanimity on its definition, there’s no one-size-fits-all approach to a financial wellness program. The EBRI survey revealed inconsistency in what employers reported as the top issues to address with financial wellness programs, and the top issues they believe their employees face. It’s no wonder, then, that lack of employee interest is a major concern. For a financial wellness program to be meaningful, employers must meet people where they are: Identify the particular issues their employees are dealing with and tailor an approach based on that. Consider the following means to gaining informative insight:
What Constitutes Success
Another common challenge among employers has been how to quantify the value of a financial well-being program. This is certainly a valid concern, especially if you’re looking at big-picture variables such as employee retention, the outcome of which is difficult (though not impossible) to attribute to one particular thing. Measuring success is easier if you have a clear objective from the beginning. Again, narrow the focus and then evaluate individual parts of your program independently. Remember the company match example? An employer might take a look at 401(k) contributions after rolling out such a campaign to see whether there was an uptick in employees’ saving. Or, if you have a bigger-picture objective, like employee retention and satisfaction, employee surveys can be a great way to take the pulse of workforce morale.
In general, benefits can give employers a competitive edge in keeping their best people from walking out the door. The state of financial stress among US employees, coupled with the idea that employers are seen as a trusted source of financial information, points to the vested interest employers have in continuing to explore ways to provide their workforce with helpful resources. For more tips on how you might roll out a financial wellness program in your workplace, check out our six-step framework.
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EXP: November 31, 2020
i State Street Global Advisors, DC Investor Survey 2015.
iiBank of America, 2019 Workplace Benefits Report.
iiiEmployee Benefits Research Institute, 2019 Employer Financial Well-Being Survey.