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Financial stress is a leading cause of lost productivity, unplanned absences and greater distractions, but benefit utilization of financial wellness programs remain low.

The financial industry as a whole is starting to have access to financial wellness benefits and employers are starting to adopt those benefits more rapidly than they have in the past, says Chris Whitlow, CEO of Edukate, a financial wellness benefit provider that offers personalized financial guidance and connects employees with relevant benefits to help them make more confident financial decisions.

The biggest fail on an employer’s part is to just add a benefit because it’s cool, hot or trendy at the moment, Whitlow says. “You need to understand your demographics,” he insists. “When you understand what they need to be successful, the good employers are adding those benefits.”

In fact, 57% of workers report they are very or somewhat stressed about their financial situation, according to a 2017 report from Prudential.

“Companies are beginning to recognize the link between financial stress and employee productivity, which can also have a negative effect on workforce management costs,” adds Andy Sullivan, head of workplace solutions at Prudential Financial. “As a result, many companies are taking deliberate actions to expand traditional workplace benefits by incorporating holistic programs that help employees improve their financial health.”

Historically you’ve seen the 401(k) as the primary financial benefit, Whitlow says. What we’re starting to see now are some of the new benefits in the marketplace.

“When you think about retention and how we provide benefits that mean the most to employees, I think employers are starting to see the writings on the wall,” Whitlow says.

For example, Shift Savings is an organization that allows workers to save emergency funds and employers can match that balance, he says. And an Orlando-based startup, TAB (travel as a benefits), is creating a way for employers to match employees when traveling — such as flights and cruises, he adds.

Whitlow says Edukate, for example, looks at nine holistic issues cash-strapped employees might be taking on at a given time: budgeting, starting a family, purchasing a vehicle, managing credit, retirement readiness, conquering student loans, getting married, estate planning and/or purchasing a home.

A lot of employers come in thinking retirement is what employees are interesting in, Whitlow says. “In our data, retirement readiness is only selected about 10% of the time. Ninety percent say they’re focused on something not retirement related, he added.

Boosting fiscal health

Whitlow says there are four areas Edukate helps employers can improve worker financial wellness.

First, you have to help employers understand their demographics, he notes. “You have to have engagement. You have to engage employees. We help employers understand who their employees are.”

The second is you have to connect them to guidance that is meaningful to the employee. “For 40 years, we’ve just been throwing the retirement plan at them when they didn’t need it. You need to deliver meaningful guidance,” he reiterates.

The third thing is you have to present the employee with the most relevant benefits that supports the guidance you’re giving them. For example, when starting a family, are your employees aware that short-term disability will help pay for their salaries while they’re on maternity leave? Employees think, “Wow, that’s a meaningful benefit that my employer offers, I should engage in that.”

The fourth thing is helping employers understand how to define and redefine the culture they’re delivering to their employee base around money and making decision around money.

“If we do those things well, we’re going to get less financial stress and more benefit utilization,” he says.

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Financial literacy Financial wellness Financial stress Retirement education Retirement readiness Retirement income