Employer provided benefits are in sharp focus as 2018 draws to a close and one benefit gaining traction is financial wellness programs.
In 2007 I created one of the earliest workplace financial wellness programs, now called Momentum onUp. I’ve had a front-row seat both to the significant impact financial education can have in the workplace, as well as to its rapid growth over the past decade. The space has gotten more crowded and companies are increasingly understanding their role in addressing the financial stress than plagues so many Americans, regardless of income.
A recent PwC survey of U.S. employees showed that financial wellness is the most desired benefit exceeding even student loan repayment. According to the SunTrust National Financial Confidence Index, 43% of Americans don’t have $500 saved for emergencies and two-thirds report that financial stress keeps them up at night. That worry follows them to work, often leading to lower satisfaction in pay, decreased productivity and poorer health.
Financial stress is not a new problem and financial education is not a new solution — but workplace financial education is. When a person’s financial education and paycheck come from the same entity, a compelling alignment takes place. More than 80% of SunTrust employees were more confident about their finances after completing a financial wellness program, according to an internal survey of employees. Today’s workforce also has a growing expectation that their employer will engage and support them on personal matters such as financial wellness.
Workplace financial wellness is following in the footsteps of physical wellness programs. It was only around 15 years ago that the concept of employer-supported physical wellness was new and exciting. Gradually, those initiatives took root, spread and evolved, becoming a permanent fixture in employee engagement. Similar to physical wellness, financial wellness is not a one-time program. Life and circumstances change continually, making financial wellness a perennial challenge for employees.
A U.S. Chamber of Commerce Foundation report examined this trend and discovered that businesses are finding success with financial wellness programs, realizing significant return on investment in terms of employee recruitment, retention, productivity and satisfaction. The report concluded that financial wellness programs will continue to be an integral part of employee benefit packages.
Not all workplace programs are equally successful, however. Though the demand for personal financial help is there, most programs struggle with participation and this lack of engagement keeps some programs from succeeding. Employees often don’t participate because they find finance boring, stressful or overwhelming. They assume the program will try to sell them something, or they feel self-conscious about signing up due to confidentiality concerns.
It’s important to teach people how to let their core values drive their personal finance and to think about money in a new way. Too many programs dive immediately into education, without first taking the time to engage people.
Another tactic that increases impact is incentivizing employees. You can tie the incentive to participation, like $100 for going through the program, or specific actions such as matching the employee’s contribution to an emergency savings fund, up to a set amount. Around one-third of companies offering Momentum onUp choose to add an incentive, helping motivate employees and build their personal momentum towards financial confidence.
Employees who completed Momentum onUp who had emergency savings rose from 68% to 98% and investment contributions for retirement grew by 35%.
Brian Nelson Ford, Employee Benefit Adviser
10 Dec 2018