The financial stress that’s pressuring today’s workers is affecting their overall health, and it doesn’t help employers much either.
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The good news is that the risks financial stress pose are increasingly being addressed through widespread implementation of financial wellness programs. The bad news, though, is that participation rates are disappointing. And employers are struggling to find effective ways to accurately measure their value.
You can take your pick of the data that’s been collected to make the case about the problem. One study found that 42% of the nearly 5,000 U.S. employees surveyed were worried about their finances—52% said they lived paycheck to paycheck. At the same time, they also suffered from health issues. Not surprisingly, they also missed more work, 4.4 days and had many more days when they were on the job but disengaged (12.5) as compared to others less stressed.
The fact that every demographic in the workforce is financially unwell, to some extent, has led as many as 83% of U.S. employers with 100 or more employees to institute programs to help address the issue. That’s far greater than what we were seeing in 2015, when only 20% of employers offered programs. But if only a third of those who could benefit are actually tapping into them, as some studies suggest, there’s a disconnect at play. Until it’s fixed, everyone loses.
A good place to start is by recasting your traditional employee wellness programs in a more holistic, well-rounded, and relevant way. Financial wellness should be an important cornerstone, but it is not solved with cookie-cutter solutions. A generic approach is not appropriate for today’s workforce or for the variety of financial pressures it deals with.
Instead, a financial wellness program should be customized according to the specific requirements and comfort levels of different employee groups—their life stages, income levels, and family dynamics. Its components should be delivered through means that are the most relevant to the audiences being served. And it should focus on four fronts: debt management, emergency savings, asset protection, and retirement planning.
If you’re wondering what a good financial wellness program would look like, it might be easier to describe what an ineffective one looks like: group workshops with one-size-fits-all budgeting calculators. Instead, some solutions might provide one-on-one coaching, while others may provide digital tools, like debt reduction or savings calculators or financial management worksheets.
Solutions should be based on your workforce demographics and their chief concerns. These can be employer-sponsored or offered as low-cost voluntary benefits, or both. Three examples are:
- Your Millennials will benefit by a student loan management/repayment program, giving sponsoring employers (especially if they contribute) a leg up in recruiting and retention efforts.
- Retirement readiness is relevant to all ages (and Millennials may be more open if they’re more comfortable about their school loans). One facet of your financial wellness program might help retirement plan participants use income replacement software tools to indicate how much they should be saving given their existing account balance and age to build a paycheck for life at retirement age.
- Employee purchasing programs make big ticket items within reach, avoiding credit card debt, hidden fees, and interest charges. They are voluntary benefits that cost the employer nothing and are administered through payroll deductions.
It all makes a lot of sense, especially to employers that monitor the pulse of their workers and have, if nothing else, become aware of the shared price to be paid for a financially ailing workforce. But, surprisingly enough, 70% of employers that offer financial wellness programs haven’t come up with formal means by which to measure their value.
It doesn’t really have to be so hard. Most employee outreach programs, for example, are based on surveys. A financial wellness program would be no exception, offering insights into their financial concerns, pressures, and attitudes and what types of services or information they’d find helpful in addressing them. It could also be a baseline for future surveys as the program matures, along with being tied to harder data, like absenteeism.
There’s an inextricable link between the physical and the financial health of today’s workforce, and employers deserve a lot of credit for stepping up with programs to address it. But there’s still a disconnect between program design and approach and employee needs. Better planning around the notion of relevance will go a long way.
Michelle Clark is Senior Vice President, Health & Performance for global employee benefits insurance brokerage HUB International. She leads a team of consultants focused on helping companies help their employees be their healthiest selves, so they can be happy, healthy, and productive individuals.
Because of her father’s much too early death due to heart disease, Clark has devoted the past 20 years of work to ensure that companies provide well-rounded benefits and holistic well-being programs to their employees so that other children don’t have to experience the preventable loss of a parent as she did.