How Everyone Wins With More Holistic Approach to Employee Financial Wellness

By
Michelle Clark
,
Senior Vice President, Health & Performance Practice
of
HUB International
By
,
of

A worrisome number of Americans suffer from financial stress these days, and the fact is that they are paying the price at home and on the job.

Some 55 percent of Americans are merely financially coping, one study finds, while 17 percent are vulnerable, struggling in almost every aspect of their financial lives[1]. It’s manifested in distraction, memory and concentration issues, and neglect of physical health – and those are only at the tip of the iceberg.

Since their performance as productive employees is jeopardized, employers should be worried about the growing trend. There’s a definite link between financial and physical health and when it’s off-kilter, they are paying the price, too. Start with higher rates of absenteeism, tardiness, and presenteeism:  Financially stressed employees miss 4.4 more days of work and experience 12.5 more days of being disengaged than those who aren’t financially stressed[2]. They’re also more prone to accidents, and that can boost disability and workers compensation claims.

Recognition of the problem and the shared cost has led to a big jump in the number of employers launching programs that aim help remedy the financial ailments their people are grappling with. In 2015, only 20 percent of U.S. employers with 100-plus workers offered financial education assistance. Today, that’s grown to 83 percent. That’s good news. What’s less positive is that the programs are only tapped into by about a third of the those who need the help – who don’t necessarily see the offers as relevant to their problems[3].   

That kind of participation rate can – and should – be improved. After all, employers have as much of an interest in helping their people achieve financial fitness as they do physical fitness. They’ll have more success in the long run by adopting a more holistic perspective of wellness, one where all the interconnected internal and external factors affecting their workforce are attended to.

A more holistic perspective will lead to wellness programs where financial health joins other important cornerstones like diet and exercise, and solutions are tailored according to life stages of the employee population and the pain points that tend to be common to each group.

The problem with many corporate financial support programs, according to studies, is that they tend to be set up as one-size-fits-all group sessions with generic budgeting software. This approach tends to shoot wide of the mark for people with issues that budgeting software by itself doesn’t address.  

A better approach is to drill down closer to individual concerns that fall into three main buckets of financial stressors: debt management, asset protection, and retirement planning. Solutions should be delivered in a format that is familiar and comfortable for each generation. And it’s not only your employees’ financial pain points that need to be addressed. Whether sponsored or low-cost voluntary benefits, they should be evaluated for the role they play in areas like recruiting and retention, as well as in reducing absenteeism and similar issues.

Here’s how to think about your financial wellness programming framework:

Millennials need help staying above water with student loan debt

Millennials (1981-1996) are today’s hottest recruiting target. But this group’s heavy student loan debt burden means that any assistance you can provide in managing, consolidating or paying it down ( via digital, preferably mobile, channels) will be valued and set your recruiting apart from competitors. It also wouldn’t hurt to encourage this age group (along with other generations in your workforce) to think about retirement planning. One attractive option is to provide plan participants income replacement software tools that show how much they should be saving given their account balance and age to build a paycheck for life at retirement age. 

Helping GenXers can manage the loaded ‘sandwich’

GenXers (1965-1980) are sometimes called the “sandwich” generation given the competing financial pressures in caring for their parents in retirement and their children as they ready for college. They prefer digital resources to help them manage their finances, like access to websites offering basic money courses. But many often face another issue of coming up with cash for emergencies, making programs like employee purchasing programs attractive. Administered through payroll deductions, these cost employers nothing as they make big-ticket purchases affordable, incurring no credit card debt or extra charges.

Baby Boomers Need to know their financial options as retirement looms

For Boomers (1946-1964) retirement readiness is a big issue, and resources that most appeal will be online or one-on-one coaching. Many are seeing a gap in their retirement savings (the Great Recession took a toll and many are still recouping), and are challenged to budget sufficiently to reduce debt. Another concern is better investment management with retirement in sight, along with planning for long-term care costs. In addition to money management coaching, particular products may be attractive, like employer funded long-term care benefits that offer tax advantages for employer and employee.

Structuring an employee wellness program that compliments your overall emphasis on wellness is one thing. Ascertaining that it’s working is another – a challenge that 70 percent of employers say they haven’t satisfactorily addressed[4]. You might start as you would any time you need insights into targeted audiences, whether customers or employees: A baseline survey. In this instance, it would shed light on specific financial pressure points and needs of your employee groups and signal the way for programs and services that would help. Future surveys could gauge their progress, aided by tracking of hard data, like absenteeism rates, over time.

The financial wellness of today’s workforce is a burden that everyone shares. Employers who take it upon themselves to address the issue with solutions that are useful and relevant will go a long way toward improving everyone’s fortunes over the long term.

 

 

About the authors:

Michelle Clark is Senior Vice President, Health & Performance for HUB International.

[1] https://cfsinnovation.org/research/u-s-financial-health-pulse-2018-baseline-survey-results/

[2] https://www.willistowerswatson.com/en/press/2017/11/us-employees-financial-well-being-falters

[3] https://www.pionline.com/article/20180903/PRINT/180909977/gauging-value-of-financial-wellness-plans-a-struggle

[4] https://www.forbes.com/sites/nextavenue/2018/08/01/why-workplace-financial-wellness-programs-arent-well/#322bc33d58f2