Financial wellness programs are further cementing their place in workplace benefit plans, but challenges remain for employers in precisely defining what financial well-being means.
While financial wellness programs have not yet reached the level of penetration seen with other longstanding benefits offerings, 52% of employers said that they have implemented, or are considering implementing, a financial wellness program, according to a new survey from Charles Schwab.
Further, 44% believe that a financial wellness program is becoming a “must-have” benefit in order for them to be competitive, according to the report.
“The definition of financial wellness is very personal for each employee, and employers need to be mindful of that when implementing a new program,” says Nate Bidner, managing director of Schwab Workplace Financial Solutions.
Generally, employers are defining financial wellness for employees as better financial outcomes and a reduction in financial stress as a result of employees taking ownership of their financial well-being, Charles Schwab says.
According to the survey, most of employers believe that a high quality financial wellness program should:
· Offer broad guidance on personal financial management principles, including goals-based planning, savings fundamentals, debt management and asset allocation;
· Provide an online content portal for access to education and assessment tools;
· Fully integrate with existing benefits and compensation packages; and,
· Demonstrate a measureable impact on retirement plan usage and retirement readiness.
“While general education and tools are useful for a broad cross-section of employees, the real task is to get them engaged and motivated to utilize the resources available,” Bidner says.
And employees are clamoring for help. According to Schwab, 70% of workers want personalized investment advice for 401(k) plans.
“Employers can play a huge part in helping their employees take ownership of their finances by encouraging them to take an active role, ask questions and ultimately take accountability for their financial future,” adds Nathan Voris, managing director of business strategy for Schwab Retirement Plan Services.
A majority (59%) of employers said the best way to structure financial wellness programs is to integrate the offering with the rest of the employee benefits package, according to the study. While 37% of employers expressed concern over the potential cost of implementing a financial wellness program, the truth is that many of the features typically overlap with those already used by employers.
“The path to financial wellness often starts at work, and it is encouraging to see so many companies moving towards making it a priority,” Voris says.
And when asked about how to measure success in a financial wellness program, 62% of employers surveyed see increased participation in retirement programs as the biggest measure of success.
“Implementing a financial wellness program doesn’t need to be disruptive to existing benefits and compensation programs,” Bidner says. “In fact, it should complement them. Current programs should be evaluated for their effectiveness in meeting the challenges, whether simple or complex, that employees face. Employers can then incorporate additional elements to help educate employees and enable them to make better use of company offerings.”
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