Benefits and Compensation

4 Tips for Incorporating a Financial Wellness Program in Your Company

Benefits specialists identify providing financial wellness training and tools as a key workplace trend for 2017.  “Financial wellness is hot. In the past year, the number of employers recognizing the impact financial stress has on employee productivity reached critical mass. As a result, we are seeing a big jump in the number of companies saying they intend to offer financial wellness support to their employees,” said Carla Dearing—CEO of SUM180, an online financial wellness service—in a press release.

financial wellness

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“When 81% of workers say financial problems have affected their productivity and 46% admit to spending two to three hours per week on personal financial matters while at work, the question is no longer whether your company needs to implement a financial wellness program, but how,” Dearing continued.

Consider the following:

  • 56% of employers indicate they are very likely to create or focus on the financial wellbeing of employees in ways that expand beyond retirement decisions.
  • 89% of employers indicate they are very or moderately likely to add tools, services, or communications to expand their financial well-being focus.
  • 55% of employers already offer help in at least one category that falls under the umbrella of financial well-being and 38% have at least three categories covered. By the end of the year, these percentages are expected to grow to 77% and 52%, respectively.
  • 6% of employees “strongly agree” that their company does things to help them manage their finances more effectively.

“The disparity between what employers are doing and employees’ perception of the benefits provided points to a real opportunity. For those employers that ‘get it right,’ financial wellness has tremendous potential to drive engagement and retention,” Dearing said.

Companies attempting to benchmark new financial wellness offerings against those of other companies, however, quickly discover a daunting lack of consensus in the use of existing tools and services. “For one company, financial wellness may be managing day-to-day finances. For another, it may be providing employees with a comprehensive financial plan that includes tax strategy and estate planning. No one area of financial wellness is emphasized by a majority of employers. Clearly, financial wellness is still in its infancy; it’s an ‘anything-goes Wild West’ of offerings and implementations,” Dearing continued.

For employers tackling financial wellness in these early stages, Dearing recommends the following process for cutting through the confusion:

1. Define Financial Wellness

Financial wellness can include:

  • Better 401(k) education,
  • Stopping hardship loans from company retirement funds,
  • Eliminating and offering alternatives to payday borrowing,
  • Basic budgeting,
  • Advising new managers on building wealth, and
  • Helping near-term retirees preserve their retirement savings.

While a company may choose to focus on one area, keep in mind that a more comprehensive program offers employees valuable ‘big picture’ context, which can drive engagement and success. For example, a program that includes goal setting and debt management, rather than merely 401(k) education, can help employees appreciate the value of their benefits, as well as the importance of balancing short-term needs against long-term goals.

It’s also critical for companies to recognize that financial wellness includes skill building and implementation in addition to education. Employees need to learn the right thing to do—and how to get it done.

2. Review Current Offerings

The financial wellness industry is evolving quickly, as are the offerings, and number and types of players. Meet with each provider you’re considering to understand what they offer. Be prepared to create your own matrix of ‘what is possible’ based on what’s available.

Whichever area(s) of financial wellness your company chooses to address, a key factor for success is personalization. Instead of making the program the focus, bring general principles home by addressing employees’ specific circumstances.

Many financial wellness programs fail because they focus on ‘education’ and ‘literacy,’ but employees will engage with a program when it feels like it’s about them and their situation specifically. Ask providers how they tailor financial advice to the individual needs of your employees.

3.  Determine Your Financial Wellness Goals

Determine your financial wellness goals within the context of your company values and your employees’ needs. Incorporating financial wellness into your benefits offerings is an important investment, so be sure it fits with your company’s mission, business strategy, and culture.

  • Ask yourself why you want to include financial wellness among your benefits offerings. For example, in a recent survey, most employers (85%) answered, “It is the right thing to do.” Almost as many (80%) answered, “To help increase employee engagement.” More than half (57%) think “financial education would boost productivity.”
  • Find out what your employees need from a financial wellness program; let them help you identify and prioritize the sources of their money stress. Do they have trouble managing emergencies? Are they struggling with high-cost credit? Do they need help achieving financial security?
  • Clearly articulating your goals up front will enable you to craft a program that rewards your investment with measurable employee engagement and long-lasting, sustainable behavioral change.

4.  Match Available Offerings to Your Strategy, Goals, and Budget

Determining what you can spend to achieve your goals is key for this step. As you go through the decision-making process, consultants, advisers, and providers should be doing all they can to make the process easier. The best partners will offer webinars, instructional materials, and demos—whatever it takes to save your company time and energy in finding a fit. They will also work with you to customize their offerings to your company’s needs and budget.

“Employers should take the time to work through these suggested steps up front. What they learn will clarify the processes of provider selection and program design, and enable them to create an effective financial wellness program in their workplace,” Dearing concluded.

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