Keys to building a roadmap for employee financial wellness.
By Kathy Hall
Financial stress is not a problem based on income. According to Price Waterhouse Coopers’ 2015 Employee Financial Wellness Survey, 22 percent of employees earning $100,000 or more find it difficult to make their minimum credit card payments on time each month. When employees can’t meet their financial needs or wants, it’s hard for them to keep their focus during the day and engagement suffers. According to the Society for Human Resource Management (SHRM), 83 percent of HR professionals indicated that personal financial challenges had a “large or some impact” on overall employee performance. Almost half indicated that an employee’s ability to focus on work (47 percent) and overall employee stress (46 percent) were the aspects of employee performance that were most negatively affected by personal financial challenges.
To help, more organizations are recognizing that adding or incorporating a financial wellness component to their benefits is a smart move. In fact, according to SHRM, more than 90 percent of 250 large employers surveyed say they want to introduce or expand their financial wellness programs in 2015.
Not just employees benefit from financial wellness programs: Organizations enjoy a return of up to $3 for every $1 they spend on comprehensive programs, according to a white paper released by the Consumer Financial Protection Bureau (CFPB). These savings occur, in part, because workers who adopt more positive money habits have a greater impact on their company through increased productivity, fewer sick leaves, and reduced claims for disability and workers compensation.
Program Development How-To
The evolution of financial wellness in the workplace is in full swing, yet the design of these programs still varies widely from one employer to the next. As companies compete to attract and retain top talent, it becomes particularly important to have a program that is meaningful to their workforce. It is not enough to provide links to education and hope that people use them. There is a big difference between basic financial information and a robust financial wellness program. It is the upfront involvement of your employees, as well as the strategic planning, commitment, and execution that determines success.
Best practices for a financial wellness program include:
Consult with experts. You’ll want a financial partner who will focus on the specific needs of your workplace and spend the time to discover just what those needs are. It’s important to evaluate your potential financial wellness partners. Review their program materials and communication strategies to ensure their approach is on education and resources, not sales. Ask to see samples in advance of making a commitment to a program. Organizations should also check on references from employers who have already used their program.
Conduct an online, confidential, employee assessment. The only way you will know how to help your employees is if you evaluate their needs. When your employees know that you will be building a program based on their specific needs, it will encourage program adoption. A confidential assessment will show where they stand on basic financial literacy. The assessment should also include questions that identify the employees’ overall financial stresses. It is critical that the survey be anonymous and confidential. If employees believe that their employer will know their personal financial stresses and individual circumstances, they may be less forthcoming because of concerns about how it will impact them in the workplace. The best practice is for the company to receive only aggregate results, with individual results belonging solely to the employee.
It is also important to give participants an immediate and constructive response following their assessment. Giving them information on how they fared, with financial resources they can access immediately, will help to keep them engaged. The information gleaned is also critical intelligence for the strategic development of the plan.
Execution and commitment. All organizations have experienced new employee programs that fade into the abyss after the first survey. A program should be structured with longevity in mind, understanding resources and demands. Organizations can structure a plan that is entirely delivered through remote channels, or with a combination of in-person sessions spaced over time. It does not need to be a resource drain. The right program will actually help save time, as it increases employee engagement and overall workplace productivity.
The full impact of a well-executed financial wellness program is immeasurable. When organizations empower people with fundamental skills for money management, they bring that knowledge home to their families and communities. Financial wellness in the workplace inspires people to be successful, gives them tools to make their money stretch further, and creates a financial future they once thought was out of reach.
Kathy Hall is vice president of business development for financial cooperative Alliant Credit Union.
Designing a Roadmap
When working together with a financial partner, consider the following:
Employee demographics. Where are employees located and what is the best way to communicate with them? Prioritize topics, determine delivery options, and map financial wellness initiatives based on need and resources.
Communications. Consider both remote and in-person delivery options. In-person events can be held as simple lunch-and-learn events during the day. Depending on the work environment, an after-hours session with family members could be a good fit. Remote delivery channels are important to provide a consistent benefit for all employees. They allow employees to gain information on-demand, which is what most consumers are looking for today. Video conferencing, remote brown bag lunch and learns, pre-recorded videos, and newsletters are important options to offer.
Messaging. Each component of the program should be labeled as part of the financial wellness program. The repetition of this message will reinforce employees to that the organization is committed to their financial well-being, as well as increase program awareness.
Existing partners. A well-constructed financial wellness plan knits together the various business partners and includes a cohesive delivery plan for your employees. For example, a 401(k) provider and a credit union or bank on site should collaborate so that there is a coordinated plan and clear definition of roles.
Incentives. Incentives increase program participation. Consider integrating existing wellness program incentives with the financial program. If not, keep incentives simple and tied closely to each step of the program. They can be inexpensive: as simple as an iTunes gift card or an extra hour for lunch.