Employers Sharply Increased Financial Well-Being Benefits in 2017

Navigating financial wellness options is necessary to create effective programs

Stephen Miller, CEBS By Stephen Miller, CEBS June 2, 2017
Employers Sharply Increased Financial Well-Being Benefits in 2017

Providing financial wellness training and tools was expected to be a key workplace trend for 2017, and new research findings show that to be the case.

The Society for Human Resource Management's (SHRM's) 2017 Employee Benefits survey report, based on a survey of SHRM members conducted earlier this year, found that more organizations are offering financial advice compared to 2016 and to five years ago.

"This benefit can help employees improve their financial management skills, plan how to manage debt, and hopefully alleviate stress and worry as a result," said SHRM researcher Tanya Mulvey, the survey project leader.

Financial Advice Benefits Trending Upward

As of 2017, nearly one-half (49 percent) of employers offered some type of financial advice, which included providing resource materials or referrals, online assessment and advice tools, and group instruction and one-on-one advice with a financial counselor.


(Click on chart to view in a separate window.)
Source: SHRM 2017 Employee Benefits survey report

"We are seeing a big jump in the number of companies saying they intend to offer financial wellness support to their employees," said Carla Dearing, CEO of SUM180, an online financial wellness service in Louisville, Ky. "For those employers that 'get it right,' financial wellness has tremendous potential to drive engagement and retention."

However, there's a lack of consensus on which advice options to provide. "For one company, financial wellness may be managing day-to-day finances," Dearing said. "For another, it may be providing employees with a comprehensive financial plan that includes tax strategy and estate planning."

[SHRM members-only how-to guide: How to Design an Employee Benefits Program]

Action Steps

For employers tackling financial wellness, Dearing recommends the following process for cutting through the confusion:

Step 1. Define Financial Wellness

Financial wellness can include:

  • Better 401(k) education on savings rates and asset selection.
  • Dissuading participants from taking loans or withdrawals from their retirement funds.
  • Eliminating and offering alternatives to payday borrowing.
  • Teaching basic budgeting.
  • Advising new managers on building wealth.
  • Helping near-term retirees preserve their retirement savings.

"While a company may choose to focus on one area, a more comprehensive program offers employees valuable 'big picture' context, which can drive engagement and success," Dearing advised.

Step 2. Review Current Offerings

The financial wellness industry is evolving quickly, as are the offerings and the number and types of players. "Meet with each provider you're considering to understand what they offer. Be prepared to create your own matrix of 'what is possible' based on what's available," Dearing said.

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 about them and their situation specifically, Dearing noted. "Ask providers how they tailor financial advice to the individual needs of your employees."

For example, a program that includes goal setting and debt management can help employees appreciate the importance of balancing short-term needs against long-term goals. The focus should be on building skills—employees need to learn the right thing to do and how to get it done for long-lasting behavioral change.

Step 3. Determine Financial Wellness Goals

Incorporating financial wellness into benefits offerings is an important investment, so be sure it fits with your employees' needs as well as your organization's mission, business strategy and culture, Dearing recommended. For instance:

  • Ask why you want to include financial wellness among your benefits offerings. If it's to boost retention or productivity, plan to measure changes in these metrics among program participants.
  • Find out what your employees need from a financial wellness program. Let them help you identify and prioritize the sources of their money stress. Do they have trouble managing emergencies? Are they struggling with high-cost credit? Do they need help achieving financial security?
  • Match available offerings to your strategy, goals and budget. When using third-party service providers, determine what you can spend to achieve your goals and find partners willing to work with you to customize their offerings to your company's needs and budget.

Leveraging Existing Benefits to Build a Financial Wellness Program

Fifty-nine percent of U.S. and Canadian corporate executives say the best way to structure financial wellness programs is to integrate the offering with the rest of the employee benefits package, a recent survey by financial services firm Charles Schwab shows. While 37 percent of employers expressed concern over the potential cost of implementing a financial wellness program, "many of the features typically overlap with those already used by employers," said Nate Bidner, managing director of workplace financial solutions at Schwab.

"Today's 401(k) and equity compensation plans are already structured to arm participants with knowledge and encourage active engagement, and as such, these plans may be leveraged to build a financial wellness program without adding cost or significant resource demands," as discussed in a new Schwab white paper on financial wellness program design, Bidner said.

"Implementing a financial wellness program doesn't need to be disruptive to existing benefits and compensation programs; it should complement them," he added. "Current programs should be evaluated for their effectiveness in meeting the challenges, whether simple or complex, that employees face. Employers can then incorporate additional elements to help educate employees and enable them to make better use of company offerings." 

Related SHRM Articles:

Reduce Employee Financial Stress, The SHRM Blog, July 2017

Tear Down the Silos Between HSAs and 401(k)s, SHRM Conference Today, June 2017

Is 2017 the Year of Employee Financial Wellness Programs?, SHRM Online Benefits, January 2017

Financial Wellness Success Requires Proactive HR, SHRM Online Benefits, September 2016

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