Why your clients need to create a successful financial wellness program
by Meredith Ryan-ReidMs. Ryan-Reid is senior vice president, distribution development and benefits delivery, group benefits, MetLife. Visit metlife.com
As the workplace continues to evolve, so do employees’ expectations of employers. Today, employees are looking for a personalized work experience, with flexible working arrangements and customizable benefits. One area with a growing demand is financial wellness. According to MetLife’s 16th annual U.S. Employee Benefits Trend Study (EBTS), an overwhelming majority of employees, 84%, view financial wellness programs, education or tools as must have or nice to have, yet just 18% of employers offer these types of solutions.
This is a missed opportunity for employers. Not only does the financial wellness of their workforce impact employees, but it can also affect their business. A successful financial wellness program reduces absenteeism/presenteeism; increases productivity; drives loyalty and reduces turnover. It can also be an asset when recruiting, differentiating an employer in the war for top talent.
Despite the improved economy, employees still have significant financial concerns. The EBTS finds less than half of employees, 40%, feel in control of their finances and 52% report living paycheck to paycheck. Forty-six percent of employees feel overwhelmed by financial decisions and nearly a third, 30%, of employees admit to lying awake at night worrying about money.
Employees are looking to their employers for help to improve their financial wellbeing— according to the EBTS, half of employees, 50%, feel employers have a responsibility for the financial wellbeing of their employees. And, these programs can have a positive impact: according to the EBTS, 64% of employees who have some kind of financial education/workshops are more likely to feel financially fit.
Uncovering Employees’ Financial Pain Points
Even if employers grasp the need for financial wellness programs, it can be difficult to determine how to get started. An important first step to creating a successful program is getting a clear sense of employees’ current financial health. With a diverse workforce, it can be difficult for employers to grasp the breadth of financial challenges facing their employees. To ensure a financial wellness program meets all employee needs, it’s vital to have a thorough understanding of workers’ financial pain points. This means using all of the tools available, including demographic data, existing benefits data and financial health assessments.
Digging deep into the information resources available can uncover the magnitude to which workers’ experience financial anxiety and the extent to which those anxieties may be affecting the company’s bottom line.
Exploring Data Resources
As a key step in gaining a better understanding of their workforce’s needs, employers should take the time to learn who their employees are by gathering current demographic data. By reviewing this information, employers can ensure they have an accurate picture of the employees by age, generation, life stage and income/financial circumstances. Each demographic cohort that makes up the workforce has different needs and faces unique challenges. For example, members of Gen Z and Millennials may be dealing with student loan debt or may be new parents who have a need for life insurance benefits. Gen Xers and Boomers are moving toward retirement and may be sandwiched between supporting children and parents. Employees from the Silent Generation, who are still active in the workforce due to economic challenges in recent years, may be facing higher healthcare costs.
As a second step, employers should take advantage of the other data resources at their fingertips, their existing employee benefits and retirement plan data. Retirement plan and employee benefit coverage data can provide important clues into the financial health of the workforce. For example, contribution rates, average balances and loan frequency/amounts from retirement plan data can indicate whether employees have the funds to meet their daily needs, save for the future and protect against financial shocks. Reviewing coverage amounts for life and disability insurance benefits may reveal whether workers are adequately protected.
Finally, employers should go directly to their employees, evaluating at a high level to see which financial health topics are on their minds. A financial health assessment can result in an objective snapshot of specific areas of concern. Tools such as surveys, focus groups and personal observations will provide important insight into workers’ financial behaviors, attitudes and knowledge about basic money management (e.g., budgeting, managing credit cards and other debt), investing principles, retirement savings and taxes, and more advanced topics, such as the benefits of compounding and the effects of inflation.
Creating Goals and Benchmarks
After gathering the relevant data, employers can begin to use these insights to define objectives for their financial wellness program. This information can also be used to determine what elements should be incorporated into a financial wellness program as well as provide guidance on the channels through which the program is offered. Depending on the demographics of an employer’s workforce, a program may include a combination of services (e.g., budget creation, debt counseling, student loan assistance); employee benefits (e.g., savings products, insurance protection); and, communication, education and financial guidance.
The insights gleaned from the financial health assessment can also help create benchmarks. Employers can measure against these in the future to determine whether the solution has moved the needle on financial wellness. These benchmarks can prove invaluable as employers move forward with their programs. By monitoring key data points, employers can ensure their solution is on track for addressing employees concerns, or make interim adjustments as needed. This information can lead to more thorough and thoughtful decision-making as the program is implemented.
Tailoring the Program
When designing the financial wellness program, customizing it across today’s multi-generational, cross-cultural workforce is essential for the program’s success. And employees are looking for customization: the EBTS finds that 60% of employees would be willing to bear more of the costs of benefits if they were given options that met their needs, and 73% say they would be more loyal to their current employer if their employee benefits were tailored to their needs.
Placing Benefits at the Center of the Program
Workplace benefits are the building blocks for most workers’ financial safety nets. Because of this, the most successful workplace financial wellness programs will place employer-provided benefits at the center of the offering. Integrating information about the benefits available to employees into a financial wellness solution enables workers to maximize the value of those benefits with the knowledge that the programs have been designed to meet their personal financial circumstances. A thoughtful combination of employee benefits, delivered within the context of financial wellness, can make a tangible difference in helping workers understand how to build financial security.
A strong workplace financial wellness program is a win-win: by giving employees the tools they need to manage their financial health, employers can reduce workers’ stress and, thereby, reduce absenteeism/presenteeism, increase productivity, drive loyalty and reduce turnover – all of which are key to maintaining a competitive business advantage. ◊
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