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A holistic strategy addresses a range of financial needs
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You launch a financial wellness program to help employees handle money-related stress, which is distracting them from being productive at work and affecting their health. To get the ball rolling, you arrange a weeklong series of lunchtime presentations.
On Monday, a representative from the financial services firm that administers your 401(k) plan tells employees that they need to contribute more to their retirement plan. On Tuesday, the insurance firm providing medical coverage explains why employees should divert part of their salary into a health savings account. On Wednesday, an independent financial planner advises workers to create a reserve-savings fund and pay off their debts.
The result? Your employees are really confused.
What if, instead, HR devised a financial wellness approach where vendors and counselors coordinate their advice—even putting them at the same table during presentations so they can interact with employees and with one another?
In the absence of a comprehensive approach to improving employees' financial well-being, "organizations often cobble together financial wellness programs by offering solutions for a specific personal financial wellness need"—such as 401(k) investment advice, household budgeting/financial planning, health care consumerism or student-loan debt assistance—noted Lynn Pettus, a partner at Ernst & Young (EY) and Dan Eck, executive director of employee financial services at the firm.
"This siloed approach leaves gaps in the program that can limit the potential of a well-intentioned benefits suite," Pettus and Eck pointed out in EY's recent report,
How Do You Know If Financial Wellness Is Paying Off for You and Your People?
"Each touch point of a comprehensive, integrated program should include handoffs from one action to the next to minimize interruption of the financial planning process," Pettus and Eck advised. In other words, once you have a reserve fund in place and spending under control, here's what might make sense—given your income and family needs—for retirement and health care savings.
Along those lines, one element of an integrated financial wellness approach is to
tear down the silos between employees' HSAs and 401(k)s, as
SHRM Online recently reported.
Craft a comprehensive program and put together targeted communications that push employees to take action, Pettus and Eck advised. Next, evaluate the results by asking employees if their financial stress is lower, for instance.
Take It Step by Step
"Not all employers have the resources to implement a comprehensive financial education program at the outset," said Julie Stich, associate vice president, content, at the International Foundation of Employee Benefit Plans. "If an employer starts with a limited approach, it is best to focus on one or two topics that an employee assessment tool has identified as critical," advised Stich, author of the 2017 article "What Makes a Workplace Financial Wellness Program Successful?," posted online by the Society of Actuaries.
However, "if an employer has the ability to offer a wide-ranging program, research shows more success if a variety of topics are covered," she pointed out.
Employers who had successful financial wellness programs were more likely to offer education using a wide variety of formats, Stich said. These commonly include:
In addition to financial counseling and student-loan assistance, consider other benefits to help with money-management, such as employee purchasing programs or backing low-interest installment loans—both of which can help employees avoid high-interest borrowing and make payments through payroll deduction, noted Heather Garbers, vice president of voluntary benefits and technology for Hub International, in
a post on The SHRM Blog.
[SHRM members-only how-to guide:
How to Design an Employee Benefits Program]
Offer Behavior-Changing Tools
When developing a financial wellness program, "be sure that you include both educational resources and tools that support behavioral change,"
explained Nancy Cannon, manager of workplace solutions at Mutual of Omaha Insurance Co., a financial benefit provider,
"Education is the backbone to any financial wellness program," she noted. Importantly, "assure employees that they are in a safe environment where they can learn and feel comfortable asking questions and seeking more information."
Financial wellness doesn't stop with education, Cannon said, noting that budgeting templates, worksheets and loan repayment plans are tools that can help employees make long-term behavioral changes that improve their financial health.
"Offer the tools and resources needed for employees to set goals, change their behavior and celebrate their success," she advised.
Related SHRM Articles:
Tips for Launching a Student Loan Repayment Benefit,
SHRM Online Benefits, September 2017
Employers Sharply Increased Financial Well-Being Benefits in 2017,
SHRM Online Benefits, June 2017
Financial Wellness Success Requires Proactive HR,
SHRM Online Benefits, September 2016
Reach Out to Workers Living Paycheck-to-Paycheck,
SHRM Online Benefits, September 2016
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