More and more companies are concerned with the financial health of their employees, with 62 percent1 feeling extreme responsibility, which has led to more companies offering some sort of financial wellness benefits.
Unfortunately, only one-third2 of those that offer financial wellness benefits measure the success of their program.
Evaluating program data can help companies to:
- Fine-tune/change the financial wellness program to meet the specific needs of their employees
- Improve communication about the financial wellness program in terms of what is said, when it is said, and the channels through which it is said
- Know if the program is effective in helping employees become more financially well
- Determine the return on investment of the financial wellness program
One reason why companies are not measuring the success of their financial wellness benefit is that they do not know what to measure.
At Enrich, we suggest that companies use both hard data and employee-reported data in the following areas to measure success:
- Employee Financial Behaviors: These are behaviors that determine an employee's financial health in such areas as saving, budgeting, and debt reduction.
- Employee-specific Metrics: In this area, companies determine how much their employees know about finances and how they feel about their financial health.
- Employer-specific Metrics: This set of metrics looks at how employees feel about their employer and how well they use the benefits offered by their employer.
- Program-specific Metrics: Finally, you should look at how satisfied employees are with the financial wellness program and their usage and engagement levels with the program.
Within each of these metrics, companies have the option to break down the data into groups such as age, sex, department, salary level, location, employee type (full-time, part-time, remote, etc.), and more.
Here are 65 different metrics to consider as you measure the success of your company's financial wellness program:
Employee Financial Behavior Metrics
Financial wellness programs must help employees change their financial behaviors by providing the right education, tools, and motivation. Not only do employees need to learn about retirement savings, but they need to be given tools to make saving easier and be motivated to add funds to their retirement plan.
Without behavior change, employees will not experience financial wellness.
That is why looking at specific financial behavior changes can be a good indicator of a successful financial wellness program. Here are some metrics to consider in this area:
1. Percentage increase of employees who create a budget
2. Percentage increase of employees who use a budget at least yearly/quarterly/monthly/weekly
3. Percentage increase of employees who check their account balances at least monthly
4. Percentage increase of employees who pay their bills on time
5. Percentage increase of employees who contribute to their retirement savings
6. Percentage increase of the amount contributed to retirement savings
7. Number of employees who have an emergency savings account
8. Percentage of employees with an emergency savings balance equal to or greater than three months of living expenses
9. Percent of employees on track for other savings goals
Credit and Debt
10. Percentage increase of employees who pay their credit card in full each month
11. Percentage decrease in employee average credit card balance
12. Percentage decrease in employee average student loan balance
13. Percentage increase in average employee credit score
Those who understand financial concepts such as compounding interest and credit scores are at a significant advantage to those who do not, especially when this knowledge is linked with behavior change.
In the general US population, only half3 of those surveyed could answer questions related to earning, consuming, saving, investing, borrowing, insuring, risk, and finding accurate advice.
Related article: New Study Shows that Employees Need a Financial Wellness Benefit
When literacy is low and employees implement poor financial behaviors, financial stress increases.
A Salary Finance survey4 found that stressed employees bring their stress to work, which shows by employees not completing daily tasks (38 percent), not doing tasks well (34 percent), and having poor relationships with their co-workers (28 percent).
This stress can cost employers up to 14 percent of payroll expenses, which adds up to $500 billion each year for US companies5.
Because of this, employers need to measure the levels of financial literacy, financial stress, and the financial health of their employees when evaluating the success of financial wellness benefits.
Employee Financial Literacy and Knowledge
14. Overall employee financial knowledge
15. Financial knowledge by salary level
16. Financial knowledge by age
17. Financial knowledge by department
18. Percentage of overall knowledge gain
19. Percentage employees with benefits knowledge
20. Overall employee financial confidence
21. Employee financial confidence by salary level
22. Employee financial confidence by age
23. Employee financial confidence by department
Employee Financial Stress
24. Overall employee financial stress
25. Employee financial stress by salary level
26. Employee financial stress by age
27. Employee financial stress by department
28. Overall number of hours spent on the job each week on financial worries
29. Number of hours spent on the job each week on financial concerns by salary level
30. Number of hours spent on the job each week on financial worries by age
31. Number of hours spent on the job each week on financial worries by department
32. Number of claims for stress-related illnesses
33. Number of workplace accidents
Employee Financial Health
34. Number of 401k loans
35. Percentage of employees taking 401(k) loans
36. Average retirement loan balance
37. Average number of retirement loans taken per employee
38. Percentage of employees taking payday advances/loans
39. Percentage of employees with student loans
40. Percentage of employees able to meet month-to-month financial obligations
41. Percentage of income spent on discretionary expenses
Employers will also want to look at metrics specific to their company. This includes such things as employee satisfaction and engagement.
When employees are satisfied and engaged, they are less likely to seek employment elsewhere. Anything that can help companies retain employees is positive because the cost of finding new employees, on average, is $7.645 for each new hire6.
One way to determine engagement levels is whether an employee is using the benefits provided by the company. The more the benefits are used, the more likely the employees are happy and engaged.
Financial wellness programs have been shown to move benefit participation for benefits such as retirement savings, HSA, and EAP higher.
Employee Satisfaction and Engagement
42. Employee satisfaction with the employer
43. Employee perception of the employer
44. Employee turnover percentage
45. Employee days absent
Employee Retirement Plan Participation
46. Retirement plan participation rate
47. Retirement plan average contribution
48. Average retirement plan balance
49. Percentage of employees contributing enough to 401k to get a full employer match
Other Employee Benefits Participation
50. HSA contribution rate
51. EAP Participation rate
52. Utilization of other employee benefits
Finally, companies will want to look at how satisfied employees are with the financial wellness program. In addition to self-reported feelings about the program, companies can rely on both engagement and usage data.
Engagement data looks at things like how, when, and how often employees use the program. Usage data looks at the number of employees that use the program.
Both of these statistics depend on the company's commitment to financial wellness, the incentives provided, and the communications about the program to employees.
Employee Program Satisfaction
53. Overall financial wellness program satisfaction
54. Employee satisfaction with types of financial wellness courses offered
55. Employee satisfaction with how financial wellness courses are delivered
56. Employee satisfaction with communication about the financial wellness program
Employee Program Engagement Levels
57. Page views per visit
58. Average time per visit
59. Number of course completions
60. Percent of employees who respond to promotional materials
Employee Program Usage Levels
61. Total financial wellness program registrations
62. Percentage of employee population registered
63. Percentage of return logins
64. Number of times employees use the program over a specified period of time
65. Growth in program users
Be sure to find a financial wellness program that provides data in each of these four categories and then supplement the data with user-provided responses through quarterly or yearly surveys.
Armed with this data, your company can be sure they are helping their employees become financially healthy.
1 - https://benefitplans.baml.com/publish/content/application/pdf/GWMOL/2020-Workplace-Benefits-Report.pdf
2 - https://benefitplans.baml.com/IR/pages/workplace-benefits-report.aspx
3 - https://gflec.org/initiatives/personal-finance-index/
4 - https://www.salaryfinance.com/us/financial-wellness-guide-2019/
5 - https://www.bls.gov/oes/2017/may/oes_nat.htm
6 - http://www.naceweb.org/s05012013/cost-per-hire-benchmark.aspx