Financial Wellness Strategy for Employers
  • Benefits Strategy

Financial Wellness Strategy: The Four-Pronged Approach to Getting it Right

When it comes to financial wellness, here’s what it boils down to:

Employees increasingly expect their employer to help them protect their financial well-being, and employers align their benefit strategies to meet employee expectations.

It seems straightforward, right? Unfortunately, there’s a catch. Benefit professionals are tasked with aligning employee need with the right mix of financial wellness solutions, but the meaning of being “financially well” is multifaceted. For employees, that measure could be anything from being debt free or having enough savings to cover unexpected expenses, to the ability to retire when they want or even just being able to meet day-to-day expenses.

What is straightforward is the reality that financial stress impacts employees regardless of age, gender or salary. Here are a few sobering stats:

  • Two-thirds of American adults say they would struggle to come up with $1,000 to cover an emergency.1
  • Less than half are confident they’ll be able to retire when they want,2 and 48 percent are concerned about outliving retirement savings.3
  • Nearly one in four employees is providing financial support for parents or in-laws.2

That stress can take a toll on the employer as well. It’s clear that a leading effect is lower productivity when employees are spending time thinking about and dealing with financial issues. It can also translate to absenteeism or even higher turnover with employees seeking better benefits – whether that’s real or simply perceived – from a different employer. But other consequences that may be less known are areas like:

  • Higher overall health care costs when employees put off medical treatment due to immediate cost of care. 
  • Borrowing against their 401(k) or taking out high-interest predatory loans, resulting in further financial issues down the road.
  • Delayed retirement, which can have negative implications for both employers and employees.

This picture may seem like a dire one, but employers have an opportunity (and an expectation) to help employees become financially secure. And when employers do play an active role in employees' financial wellness, it benefits everyone.

Offering Options that Add Value and Meet Employees Where They Are

The market for financial wellness products has grown far and wide with a depth of options covering all areas of financial well-being. That’s good news for employers who have the opportunity to differentiate themselves and construct an offering that truly reflects the needs of their employee population. But it can also be a double-edged sword. It’s not as easy as picking a set of options for employees to choose from.  

More than half of all employees want to make their own financial decisions, but are looking to have someone to help validate that decision.2 Employers can provide access to that trusted advisor by aligning the right solutions with employee need.

It starts by moving from a passive, literacy-based approach to an active, solution-oriented approach. Here’s the four-pronged way to get it right:

Tactic 1: Evaluate workforce needs

You have a wealth of knowledge right at your fingertips – your own data, including demographics, employee survey responses, 401(k) contribution information and benefit utilization. By understanding the data you have at your disposal, you can then start to analyze it.

Here’s where you can rely on a data analytics solution that consolidates the data you need to easily identify trends and workforce dynamics. Then, in conjunction with an advisor, you can identify what your employees' greatest needs are and drive strategic decisions around your financial wellness offering.

Tactic 2: Provide choice in solutions

This tactic goes hand in hand with workforce needs as another way to view providing choice through the lens of a consumer. Consumers have different wants and needs, and in our personal lives, we have choice when shopping. The same goes for benefits. In fact, 60 percent of employees would like a wider array of non-medical benefit options.3

There are a variety of vehicles for financial wellness, and to ultimately steer employees in the right financial direction, it’s imperative to deliver options that are sustainable. Solutions like zero percent interest emergency loans or student loan refinancing are great at alleviating needs in the short-term, but it’s also important to have long-term options in the mix that focus on building – and maintaining – financial wellness. That may include options such as financial counseling and 401(k) incentives or other savings options.

Delivery of those options is not only key to consumerism, but also to your ability to increase administrative ease. A technology platform that has already built standard integrations with voluntary benefit providers and specialty product suppliers can turn what was once a very manual, error-prone undertaking into a seamless, automated process. Plus, your employees can take advantage of an Amazon-like shopping experience.

Learn how all stakeholders can come together on a single platform to expand consumer choice and convenience with BenefitsPlace.

Tactic 3: Awareness and education

While you want to take an action-oriented approach, financial literacy in the form of awareness and education is still an integral part of the total process. First and foremost, if employees aren't aware of the benefits available to them, then it's safe to assume they won't take advantage of them. And education plays a crucial role in making sure they take full advantage of the benefit. Awareness and education can encompass anything from internal announcements to highlighting the benefit in the enrollment experience and educational workshops held onsite. Plus, employees feel more confident when they have these types of resources. Sixty-four percent of employees who have some kind of financial education/workshops are more likely to feel financially fit.3

Many specialty product suppliers already have content built to help drive awareness and education. But taking it to the next level by having these sources of information in a hub that's easy for employees to access and integrated within the enrollment experience helps employees better understand their benefit options and how to take advantage of them, while also making it easier on you. 

Tactic 4: Ongoing engagement

Being financially well is a lifelong journey that can take on different meaning at different stages of life. Ongoing engagement is key to helping employees understand which financial wellness benefits are appropriate at each stage.

Some top benefits teams run mini-campaigns throughout the year to highlight different benefits their employees can take advantage of at various points in time. Communication is the driving force behind this by using tools like email, mobile app notifications and short videos to explain how these benefits work.

The takeaway is that financial stress impacts everyone at all stages of life, but with the right approach, employees and employers can reap the rewards of being financially fit.

Watch this on-demand webcast to learn more about finding the perfect mix of financial wellness solutions that address employees’ needs while enhancing your value proposition.

 

1 Poll: Associated Press-NORC Center for Public Affairs Research

2 Employee Financial Wellness Survey 2018, PwC

MetLife's 16th Annual U.S. Employee Benefit Trends Study