A 2019 MetLife study showed personal finances as the top source of employee stress. Fast forward to a coronavirus-riddled 2020. Metlife recently found that 47% of employees say that their companies have a responsibility to address their financial wellbeing, compared to 40% pre-COVID-19.
Yet many employers still struggle to implement a comprehensive financial wellness program. Why?
- Mentality. There is a notion that financial wellness programs are a perk instead of a core employee benefit. Some organizations view personal finances as beyond the scope of employer responsibility, without understanding the effects of financial stress on company culture and bottom-line.
- Strained resources. HR teams wear many hats and every hour of the day counts. There’s a mistaken belief that implementing and executing a financial wellness program will take a ton of time. However, a good program will be turnkey, should reduce the workload of HR, and does not need complicated integrations or IT resources to be effective.
- Misunderstanding costs of financial stress. Employers are already paying a high cost for employee financial stress, but do not recognize it because a large portion shows up indirectly as absenteeism, presenteeism, health care, delayed retirement, and retention expenses.
- Misperceptions of ROI. A financial wellness program is an expense saver, not an added expense. Organizations will often not explore financial wellness programs due to preconceived notions of it being too expensive.
- No dedicated financial wellness budget or flexibility to repurpose budget from other areas. Financial wellness can be paid for via retirement plan assets, wellness funds, or communication budgets, not just from general funds.
- Lack of support or buy-in from leadership. Organization economic decision-makers are not brought into early conversations about the need for employee access to objective financial guidance and education.
Identifying which of these obstacles continually impede your organization’s path to wellness will help you get started with developing a holistic financial initiative. It also helps to take a SPEC approach:
S – Start
P – Perform
E – Evaluate
C – Consider
Start with the commitment to a comprehensive wellness plan that includes physical, mental, and financial health as core components of employee wellness.
Perform a gap analysis. Review your complete benefits package to evaluate existing programs with the purpose of identifying gaps in coverage for your employee population. For example, most 401(k) administrators don’t provide holistic financial advice in areas such as budgeting, homeownership, debt pay-off, parent prep, college savings, eldercare, or employee benefits usage.
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Evaluate your existing options. What options do your current vendors provide to you for free? Structure a plan to communicate these free benefits to your employees. This will begin to bridge the gaps in your overall wellness program. Some examples:
- Encourage employees to review their retirement plans with your 401(k) vendor and/or financial wellness provider. This is particularly effective for your older workers.
- Highlight and communicate discount programs on core costs, such as cell phones or utilities.
- Share a list of financial resources, including podcasts, online resources, or local and civic organizations applicable to your population.
- Evaluate compensation opportunities. Consider offering overtime (when applicable).
Consider any additional gaps in the program. Look to include a broad-based program to enhance existing financial wellbeing options.
- Implement a financial coaching/counseling solution.
- Provide incentives (e.g., raffle giveaways) for attendance to uncomplicated financial education courses.
- Consider providing short-term loans and/or payroll advances as a voluntary benefit to aid employees through the pandemic recovery.
You’ll want to also consider future benefits for 2021 and beyond. Possibilities include:
- Automatic enrollment for retirement plans
- Enhanced child care benefits
- Extended paid parental leave
- Commuter or work-from-home benefits
- Tuition reimbursement
- Voluntary benefit programs
Ultimately, improving employee financial health is a long-term effort. There is no quick fix.