The demand for employee financial wellness programs is increasing.
Several leading wellness companies, like Castlight Health and WebMD, have integrated with financial wellness platforms in response to this increased demand from employers. But what is driving this demand?
When Oscar Wilde quipped, “Education is an admirable thing, but it is well to remember from time to time that nothing worth knowing can be taught,” I doubt he had financial wellness education in mind. However, his words certainly apply to it.
I’ve heard many friends and coworkers lament the fact that school imparted lessons about the structure of a plant cell and James Joyce’s childhood rather than life skills such as how to balance a checkbook and what a 401(k) is.
Then again, I don’t think budgeting lessons would do most students much good because such lessons are not based on the average student’s reality.
If “nothing worth knowing can be taught,” then it must be learned through trial and error.
School of Hard Knocks Is Too Hard
Unfortunately, many of the financial lessons provided by the school of life come at a high tuition cost.
According to Private Student Loans Guru, the average student loan debt for the 44.2 million Americans with these loans is now $39,400 per person1.
And it’s not only millennials, the generation saddled with the most student-loan debt, that worry about the security of their financial futures.
According to PWC’s 2018 Employee Financial Wellness Survey, over half of employees harbor persistent financial anxieties2, with financial matters being the number one cause of stress among all working generations3.
Most working Americans have learned hard life lessons about finance, and many of them feel that they could use some guidance.
Increasingly, employers are offering financial wellness training that provides employees with the resources that cater to their own unique financial needs and responsibilities.
Employer-Led Financial Wellness Training
Of course, employers must consider basic questions when creating a financial wellness training program:
What aspects of personal finance and employee benefits are most relevant to the employees?
How will employees best understand and prioritize these aspects of financial wellness?
The short answer to the first question is, “It depends on the employee.”
Each generation faces different financial hurdles.
Millennials must surmount student loans.
Gen X-ers are often raising children and managing house payments.
Baby Boomers must consider the financial implications of retirement.
While all employees benefit from a basic understanding of employee benefits—401(k) and health care options, student loan repayment, and budgeting and personal finance literacy—employers are increasingly realizing that financial wellness is not a one-size-fits-all pursuit.
This leads us to the second consideration, understanding how employees grasp financial wellness concepts.
According to a study conducted by Fidelity, many employers find success with seminars and lunch-n-learn programs. These types of trainings were offered by an estimated 82% of mid- to large-size employers in 20174.
Typically, these trainings provided information that applied to all generations of employees, including understanding employee benefits, mortgage tools, and wills. These sessions were then used by employees to build tailored lists of financial priorities.
However, it’s worth noting that although big group programs and interactive courses are a good start toward encouraging employee financial literacy, they are not the complete picture.
Indeed, over half of working millennials claimed they would benefit from one-on-one access to a financial professional5 who can address individual financial concerns and help create a personalized plan.
Benefits to Creating Financial Wellness Programs
While some legal and privacy6 concerns have been raised regarding the widespread implementation of financial wellness training, such training has proven very beneficial to both employers and employees.
This training provides a highly customizable approach to improving an employee’s sense of wellbeing. This, in turn, can increase office productivity.
A 2017 EBRI Retirement Confidence Survey revealed that 30 percent of employees think about finances on the job7. This number jumps to 60 percent among Millennials according to the 2017 Workplace Benefits Reports Supplement8. Many Millennials feel especially lost when it comes to saving for retirement.
The availability of diverse financial wellness resources may not be the flashiest or most seductive employee benefit, but it may very well be the most important. That’s because a comprehensive benefits package does employees little good unless they understand how to use it effectively.
Employers can best serve their employees by helping them get a handle on their personal finances. Oscar Wilde may have believed that nothing worth knowing can be taught, but thankfully, in the world of financial literacy, this is not true.
For more information on how the Enrich Financial Wellness Program improves employee productivity and well-being, watch our demo video here.
1 - http://www.privatestudentloans.guru
2 - https://www.pwc.com/us/en/industries/private-company-services/library/financial-well-being-retirement-survey.html
3 - https://www.pwc.com/us/en/industries/private-company-services/pfs-employee-financial-education-practice.html
4 - https://s2.q4cdn.com/997146844/files/doc_news/archive/88150356-0c7e-4f0c-9d5e-8a8aa45131b0.pdf
5 - https://www.fidelity.com/about-fidelity/employer-services/Companies-Expand-Well-Being-Programs-and-Increase-Financial-Incentives
6 - http://www.benefitplans.baml.com/publish/content/application/pdf/GWMOL/Workplace_Benefits_Report_Millennials.pdf
7 - https://www.nextavenue.org/7-questions-to-ask-your-employer-about-wellness-privacy/
8 - https://www.ey.com/Publication/vwLUAssets/EY-employee-financial-services/%24FILE/EY-employee-financial-services.pdf