Why financial wellness programs matter
Wellness programs — and the idea that investing in employees’ social, mental and physical health can deliver solid returns — have been a well-established talent acquisition and retention pillar for quite some time. As wellness continues to evolve from simply a health focus to incorporating a financial focus, many employers are considering how they can implement a financial wellness program that will be beneficial to their employees and cost-effective for their business.
Human capital management provider ADP, in cooperation with SourceMedia, recently conducted a study that uncovered the benefits of financial wellness for both employers and employees and some of the obstacles that might prevent companies from offering them. Respondents — which consisted of employee benefits decision-makers — see financial wellness programs as having a positive impact on their workforce, but only one in five companies currently offer this benefit. However, interest appears to be growing; more than a third (36%) say they have a strategy or are considering financial wellness programs.
Growing employer interest
There’s an increasing awareness that many employees still struggle with financial challenges stemming from the last recession. From dealing with debt to rebuilding retirement savings, many workers still feel financial stress in their personal lives that can spill into their professional lives, leading to lower levels of productivity and impacting the overall work environment. In fact, employees say they spend about three hours a week at work dealing with their finances, according to a PricewaterhouseCoopers study.
As a result, a growing number of employers are turning to financial wellness programs to provide a benefit that can help improve their workforce’s retirement readiness, reduce financial stress and boost employees’ financial preparedness for major life events. For example, 92% of employer-respondents in the ADP study confirm interest in providing their workforce with information about retirement planning basics, and 84%say the same of retirement income planning. Importantly, the majority of employers (86%) who offer such programs report doing so because of a general concern for their employees.
However, despite interest in financial wellness, many employers still cite a number of challenges preventing them from offering this type of program to their employees, such as a need to focus on other aspects of their business (27%) or not enough resources (15%). Additionally, when employers begin to offer these programs, they are challenged with communication and education. About half of those polled indicate that maximizing employee participation is a top challenge.
Implementation best practices
As employers continue to learn more about financial wellness programs and how to incorporate them into their broader benefits portfolio, here are four best practices to follow when implementing a financial wellness program:
· Integrate financial wellness with an existing benefits offering. Two-thirds of employers with financial wellness programs say theirs are either highly integrated or mostly integrated with other retirement or health and wellness offerings.
· Focus on financial basics. Financial wellness programs can be broad, but a few items are considered “must-haves” by the majority of employers. The survey found that 86% of employers who have a financial wellness program say personal finance basics, such as debt management and budgeting, are included while 84% say the same about retirement planning.
· Tailor the program to workers’ most pressing financial needs. Employees face unique struggles, and employers are in a good position to create a financial wellness program that meets the specific needs of their workforce. Younger employees, for example, may need assistance with debt management, budgeting and retirement basics while older employees may need guidance on how to maximize their retirement savings.
· Use “high-touch” methods for program delivery. Employers see seminars (73%), one-on-one coaching (69%) and phone support (60%) as most effective for delivering the program to their employees. Least effective methods included incentives (11%), gamification (22%) and mobile apps (38%).
Although launching a financial wellness program may seem daunting, employers can simplify the process by rolling out program components in phases that build on existing wellness or financial planning offerings. They can also leverage a range of expert resources for support, such as financial advisers who can help design and manage the programs, and provide additional content via seminars or one-on-one coaching for employees.
Implementing a financial wellness program can provide multiple benefits for employees and employers, which can include increased worker productivity, reduced absenteeism and lower healthcare costs. Employers have an opportunity to address these issues with comprehensive financial wellness programs that can help improve employees’ overall wellbeing while also helping businesses attract and retain the best workers.