We are in the Wild West phase of financial wellness. No one area of financial wellness is emphasized by a majority of employers. For employers tackling financial wellness in these early stages, here’s my advice for cutting through the confusion.

Financial wellness is hot right now. In the past year, the number of employers to recognize the impact financial stress has on employee productivity has reached critical mass. As a result, we are seeing a big jump in the number of companies that say they intend to offer financial wellness support to employees.

When 81% of workers say financial problems have affected their productivity, and 46% admit to spending 2-3 hours per week on personal financial matters while at work, the question is no longer whether your company needs to implement a financial wellness program, but how.

Consider the following:

  • 56% of employers indicate they are very likely to create or focus on the financial wellbeing of employees in ways that expand beyond retirement decisions
  • 89% of employers indicate they are very or moderately likely to add tools, services, or communications to expand their financial well-being focus
  • 55% of employers already offer help in at least one category that falls under the umbrella of financial well-being and 38% have at least three categories covered. By the end of the year, these percentages are expected to grow to 77% and 52%,

And yet, at present only 6% of employees “strongly agree” that their company does things to help them manage their finances more effectively. This disparity points to a real opportunity for employers. Financial wellness may be hot, but it’s in its infancy. As part of a company’s benefits offerings, financial wellness has big potential to drive engagement and retention – for the companies that get it right.

Companies wanting to benchmark new financial wellness offerings against those of other companies quickly discover a daunting lack of uniformity across existing tools and services, however. We are in the Wild West phase of financial wellness. For one company, financial wellness may be managing day-to-day finances. For another, it may be a comprehensive financial plan that includes tax strategy and estate planning. No one area of financial wellness is emphasized by a majority of employers.

For employers tackling financial wellness in these early stages, here’s my advice for cutting through the confusion:

  1. First, define financial wellness. Financial wellness can include:
    • Better 401(k) education
    • Stopping hardship loans from company retirement funds
    • Eliminating and offering alternatives to payday borrowing
    • Basic budgeting
    • Helping new managers build wealth
    • Helping near term retirees preserve their retirement savings

A company may choose to focus on one area, but keep in mind that a more comprehensive program offers employees valuable context, which can drive engagement and success. For example, a program that includes goal setting and debt management, rather than merely to 401(k) education, can help employees appreciate the value of their benefits as well as the importance of balancing short-term needs against long-term goals). It’s also powerful to recognize that financial wellness includes skill building and implementation as well as education. Employees need to learn the right thing to do – and learn how to get it done.

  1. Review what is currently available in the financial wellness marketplace. Offerings tend to evolve and new providers are entering the marketplace, so meet with each provider to understand what they can offer your company. Be prepared to create your own matrix of “what is possible” on the basis of what is out there.Whichever area(s) of financial wellness your company chooses to address, one big key to success will be personalization. Instead of making the program the focus, bring general principles home by addressing employees’ specific circumstances. Many financial wellness programs fail because they focus on ‘education’ and ‘literacy,’ but employees will engage with a program when it feels like it’s truly about them. Ask providers how they tailor financial advice to the needs of each employee.
  1. Turn back internally to define your financial wellness goals in the context of your company values and your employees’ needs. Incorporating financial wellness into your benefits offerings is an important investment, so make it thoughtfully, by aligning your program with your company mission, business strategy, and culture.
  • Ask yourself, why financial wellness, for your company? For example, in a recent survey, most employers (85%) answered, “It is the right thing to do.” Almost as many (80%) answered, “To help increase employee engagement,” while over half (57%) believed that “financial education would boost productivity.”
  • Find out what your employees need from a financial wellness program. Let them help identify and prioritize the sources of their stress when it comes to money. Do they have trouble managing a money emergencies? Are they struggling with high-cost credit? Do they need help achieving financial security?

Clearly articulating your goals up front will enable you to craft a successful program – one that rewards your investment with measurable employee engagement and long-lasting, sustainable behavioral change.

  1. Go through the exercise of aligning your strategy, goals, and budget with available offerings. Determining what you can spend to achieve your goals is key for this step. As you go through the appropriate process of institutional decision-making, consultants, advisers, and providers should continue to work hard to make this easier. The best partners will work offer webinars, instructional materials, and demos – anything to save your company time. They will also work with you to customize their offerings to your company’s needs and budget.

Employers should take the time to work through these definitional issues up front. It will greatly clarify the processes of provider selection and program design, and allow them to effectively bring financial wellness into the workplace.

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