Employers need to stand out in a tight labor market, and increasingly, they are turning to financial wellness programs to do the job. More than half of all employers offered financial wellness benefits in 2019, compared to one in four in 2015.
Why the need? Healthcare costs are rising faster than wages, and college costs are a growing struggle for many families. Six in 10 millennials and 45% of Gen Xers have taken money out early from their retirement plans, and according to a 2019 PwC study, nearly half of all employees said finances were their greatest stressor.
A third of employees are distracted by finances at work, and close to half of that group spends three or more work hours weekly on personal financial matters, PwC found. Financially stressed employees may also forego medical treatment, increasing absenteeism and may postpone retirement.
Experts say the best workplace financial wellness programs include these key elements:
They are administered by a trained financial expert: Employees value professional advice within a wellness program more than any other feature – but they are turned off by professionals who are obviously selling products or services. The most effective financial wellness programs are offered by professionals who are paid only to deliver the program. Qualifications to look for include Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA), since those professionals are required to put clients’ and employees’ best interests first.
They include individualized assistance with varied financial challenges: Employees say the most important feature in a financial wellness program is individualized assistance, not least because their financial stressors vary. Managers and professionals may want help with investing and planning. Other employees may be struggling with day-to-day cash flow. Women are more prone to financial stress on many levels, from retirement readiness to college costs and family financial assistance.
They demonstrate measurable success: While there is no one, standardized way to measure the impact of a financial wellness program, a quality offering will include an employee assessment before and after services are provided. Some employers find VOI (Value on Investment) a better metric than ROI, since VOI can reflect intangible results like reduced employee turnover and increased engagement.
They remove the stigma around financial wellness conversations: One reason financial stress is hard to address is that employees feel ashamed. In fact, 6 in 10 women would rather talk about death than discuss money. A quality program helps employees feel that they are not alone with their financial challenges, and that support is available.
About the Author
Kelley Holland, CFA, is a financial stress expert who, through her firm Own Your Destiny®, offers workplace programming and individual coaching for women.
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