5 Crucial Steps for Benefits Managers to Create a Successful Financial Wellness Program

A recent survey by Charles Schwab¹ shows that almost two-thirds of employers now offer some kind of financial wellness program and another 19 percent plan to implement such a plan in the next three years.

The reason why is two-fold: Americans are stressed about finances and stressed employees are bad for business.

Financially Stressed Employees

A study conducted before the COVID-19 pandemic by Salary Finance² found that 42 percent of Americans felt severe financial stress despite a growing GDP, low unemployment, and ever-increasing jobs.

A majority of those stressed about finances live paycheck to paycheck, often turning to high-interest loans to make ends meet.

• 40 percent of Americans using credit cards carry $3,000+ balances each month
• 30 percent of those under 35 have paid $100+ in overdraft fees in the past year
• Almost half of Americans have no emergency savings

A National Endowment for Financial Education survey³ conducted in the early stages of the pandemic showed that stress doubled, with nine out of ten Americans stressed about finances from long-term issues like retirement savings to immediate issues such as paying the utility bills. 

With so many Americans experiencing financial stress, every employer will feel the effects of this stress.

The Salary Finance survey found that employers spend between 13 and 18 percent of their annual payroll on lower productivity and turnover – the two main issues associated with employee financial stress.

This survey also found that employee stress is not limited to trainees and entry-level employees. Executives and C-suite employees rank in second and third place behind trainees.

Research has shown that interactive digital financial wellness can lower employee stress levels.

When asked what would help, eight out of 10 employees stated that an employer-sponsored financial wellness program would be a valuable tool.

The question then becomes, “How do we start a financial wellness program that will be valuable to and used by our employees?”

1. Determine the Goals

Each organization that offers financial wellness is unique, so the goals for the program will be unique as well.

First, it helps to examine common goals from other organizations.

There are many different goals to consider, such as:

• Increasing retirement plan participation
• Reducing student loan debt among younger employees
• Reduction of employee turnover
• Increased emergency savings funds
• Reduction of payday loans

The goals of the program should meet both employer and employee needs.

To determine what employees want to achieve, conduct a financial wellness survey.

This survey can also help you establish a baseline for employee stress levels and provide specific topics of interest to include in the program.

2. Look at Demographics

The 2019 Employee Financial Wellness Survey by PWC4 found that 71 percent of employees do not consider financial help or guidance until they have an important financial decision to make, are experiencing a life event, or find themselves in a financial crisis.

Because of this, it is important to understand the demographics of your employees so that you can have the right information based on their life stage.

A large population of Baby Boomers means information focused on retirement planning, catching up on retirement savings, estate planning, on-time retirement, and downsizing households.

On the other hand, millennials are more likely to need help with student loan repayment, buying a first home, and understanding insurance for growing families.

The best programs will have personalization that can meet the needs of all employees.

3. Find a Financial Wellness Program

How do you find the right financial wellness vendor?

Here are some things to look for:

• Offers a personalized program
• Provides unbiased financial education and information
• Takes a holistic approach so that employees can learn to take ownership of their financial future
• Provides a variety of tools, courses, and content
• Creates sustainable financial behavior change
• Includes statistics showing behavior change and program participation
• Is easily integrated with existing employee benefits
• User-friendly platform
• Cost per employee

Just as with any benefit, carefully research potential financial wellness programs before making a decision.

4. Create and Follow a Communication Plan

Despite over 50 percent of employers offering financial wellness programs, many employees state they were unaware that such a benefit existed.

Communication should begin as soon as you know you plan to provide a financial wellness benefit.

This early communication should explain why the company is offering the program and how it can help employees.

It helps to schedule all of your planned communications over the calendar year in advance.

However, not all communication is created equally.

Make sure that know the common engagement level benchmarks and have a goal for your initiative.

Consider conducting a communication audit to determine the following:

• Email open rate – Low rates mean that current emails end up in the trash folder unread. If this is the case, simply adding information about a new program to unread emails will not increase engagement with the new program.
• Website optimization – Is your website promoting the new benefit and is it easy to find?
• Integration of information – What is the best way to tie the new benefit to current employee communications? How can you best inform your employees without it looking like an advertisement for retirement planning and investing?

Once the program is up and running, promote the most compelling units of the program. 

With Enrich Financial Wellness, this would be the financial personality assessment and the financial wellness checkup.

Constantly re-evaluate your communication to be sure that it is effective and promotes the aspects of the program that will help you meet your financial wellness goals.

5. Track Results

There is no way to know if the financial wellness program is meeting the goals if you have not conducted a baseline survey and do not track results after implementation. 

Here are some key performance indicators you may want to track (go here for full list):

• Platform Usage Analytics: How many employees use the program? How often do they use it? How long do they stay on per login? Which pages see the most use? How many courses have been completed? 
• Self-Reported Data: What is the financial stress level of employees? How confident do they feel about making financial decisions? How engaged do they feel with the financial wellness program?
• Employer Benefits Use: How many employees contribute to your 401(k) program? How many employees get the full employer match? Percentage of 401(k) loans?
• Employee Financial Information: Percent of employees with emergency savings? Percent of employees that pay off credit cards each month?  Average credit score?
• Employee Satisfaction: Employee retention rate? Employee engagement rate? Employee productivity?

If you are interested in helping your employees take control of their financial future, Enrich is here to help. Check out our demo video to learn more.

1 - https://retire.massmutual.com/retire/email/business/rs48427.pdf 

2 - https://www.businesswire.com/news/home/20200212005534/en/Salary-Finance-Study-Finds-More-Than-40-percent-of-American-Workers-Are-Feeling-Significant-Fina 

3 - https://www.cnbc.com/2020/04/16/coronavirus-crisis-causing-financial-stress-for-near-9-in-10-americans.html 

4 - https://www.pwc.com/us/en/industries/private-company-services/images/pwc-8th-annual-employee-financial-wellness-survey-2019-results.pdf