Financial wellness is everywhere. Now what?
The conversation around financial wellness isn’t new, but it’s definitely ramping up. According to a recent survey by Prudential, the percentage of employers offering financial wellness programs rose to 83%, up from just 20% in the survey two years ago.
Although financial wellness is increasing in popularity, its impact and effectiveness still leaves room for improvement, as only a third of employees utilize the financial wellness benefits their employer offers, according to the 2018 Workplace Benefits Report from Bank of America Merrill Lynch.
Now that financial wellness has proven its popularity in the workplace, what comes next? Here are four things employers should work on.
Increase engagement through tools. Many financial wellness programs that employers roll out aren’t properly addressing employees’ needs. Benefits are not one-size-fits all, and in order to successfully implement a new program like financial wellness, HR managers need to use tools like gamification to increase engagement.
According to the 2018 Workplace Benefits Report, employees report wanting more personalized and direct guidance than macro-level programs.
While educational resources can provide guidance to employees as they navigate their personal finances, more adaptive employee benefits are needed to really turn the tide of effective financial wellness.
Reevaluate existing benefits. In addition to adaptive benefits, employers should also rethink how their other benefits are performing. For example, traditional retirement plans don’t work equally well for all generations. The 401(k) may not be the best tool for an individual, based on their financial situation. An employee with a large sum of credit card debt may want to pay off a portion of their debt before putting money in their 401(k).
Millennials and Gen Z are shifting the workforce and benefit packages. Younger generations may not place the same value on certain benefits that baby boomers and past generations do. They are advocating for what they need and are driving new benefits like financial wellness.
Create a budget. It’s not enough to offer a financial wellness benefit. Money should also be allocated to offering financial incentives to employees who participate or take action towards managing their goals, as well as in creating effective communications and strategies to encourage employees to enroll and engage.
Because of other organizational priorities, it’s easy for financial wellness to get pushed farther down the budget line. For financial wellness to work, it not only needs buy-in but also continued investment to truly help employees manage their financial lives.
Follow up. Open enrollment can’t be the only time that employers reach out to employees to engage them with their benefits. To make the most of benefits and financial wellness programs, employees need to be engaged year-round.
By continually engaging employees with their financial wellness programs and the resources available to them, employers can make a significant impact in both adoption rates and overall employee happiness.
Although awareness around the need for financial wellness programs is at an all-time high, there’s still work to be done. Employers should focus on not only the types of benefits they offer to employee, but also look to adapt and improve their existing financial wellness and benefits programs to continually engage employees.