Employers Turn to Financial Wellness for Workers

​Large segments of the workforce are emerging from the pandemic in a state of financial crisis. Layoffs, reduced hours, costly medical bills, and the accumulation of unpaid rent and mortgages have made employees more concerned than ever about their current and future financial states.

In a 2021 financial wellness survey from PwC, almost two-thirds of employees said their financial stress has increased since the start of the pandemic. Survey respondents who reported that their financial strain had escalated were nearly four times as likely to admit their finances have been a distraction at work.

Human resource leaders know that such concerns can impact employees' mental health as well. Some are introducing digital platforms to educate and advise workers as they repair their financial standing and plan for brighter financial futures. 

Changing Focus of Wellness Technologies

Benefits experts say that when weighed against training courses or human financial counselors, technology platforms are better at giving employees round-the-clock access to financial literacy, goal planning and decision-support tools and can be scaled for more cost-effective delivery of financial wellness initiatives across large workforces.

Digital platforms also give employees a level of privacy that other educational methods like public workshops or presentations can't. The PwC survey, for example, found that more than 50 percent of financially stressed employees were hesitant to ask for help with their finances.

Yet while the best digital platforms give workers access to unbiased, relevant content, many technology providers also acknowledge the need to make human counselors available to answer more-complex financial questions or help keep employees motivated and engaged in improving their financial health over the long haul.

"That's frequently manifested in companies offering more financial wellness technology platforms as well as one-on-one counseling through virtual options," said Mark Smrecek, senior director and financial well-being market leader for Willis Towers Watson, a global advisory company with a specialty in employee benefits. "Employees can engage with digital platforms at any time, oftentimes with family or other members of their financial networks being able to access the content along with them," he said.

Digital financial literacy content, goal planning and decision-support tools particularly suit the preferences of Millennial and Generation Z employees, experts say.

"People want fast, easy and automatic," said Devin Miller, co-founder and CEO of Secure, a digital platform that helps employees build emergency savings funds. "That means starting with digital, and that doesn't differ when it comes to finances. Employees also don't want barriers and friction involved in a transaction. While people still do like to interact in person, the pandemic has forced those less inclined to digital transactions to get used to them and enjoy them."

Stuart Lawder, co-founder and COO of Smart Path, a financial wellness platform in Atlanta, said technology is almost always on and available, which is of particular value in times of financial crisis.

"Digital platforms are all about increasing accessibility," Lawder said. "We think of it in terms of time-to-value. Employees often can receive value more quickly by accessing resources through technology rather than waiting for workshops or setting up meetings with human advisors."

Personalization Drives Digital Adoption

Many financial wellness technologies have expanded beyond their original purpose of encouraging retirement savings or building college education funds to helping employees manage spending, pay off credit card or student loan debt, and build emergency savings funds, with some of these changes spurred by impacts of the pandemic.

Smrecek said his research shows digital tools that help track spending, manage debt and build emergency savings can be especially effective in helping employees who struggled during the COVID-19 outbreak.

"Many digital platforms can now make it easier for employees to see on a daily basis what their personal balance sheet looks like in terms of earning versus spending," he said.

Top platforms also use technologies like artificial intelligence and machine learning to help build personalized road maps for employees, since financial wellness needs vary based on age, job type, career plans, gender and more.

Such personalization can happen through an assessment of an employee's financial condition, the use of analytics and artificial intelligence, Smrecek said, increasing the chances employees will continue using digital platforms over time.

"The likelihood that someone will use a technology a second or third time and then on an ongoing basis is much, much higher when they immediately see or receive relevant information that they don't have to search for," he said. "Engagement is one of the most critical aspects of well-being support, be it financial or otherwise."

One financial wellness platform that uses AI to personalize content is BrightPlan, headquartered in San Jose, Calif. It offers a "financial coach" that can analyze employees' financial data and factors like age or life goals and create attainable milestones for savings, automated investing, spending and paying off debt. An overall "wellness score" charts employee progress toward those goals, said Larry Robinson, chief product officer for BrightPlan.

Emergency Savings Plans Gain Currency

The pandemic often forced financially strapped employees to seek out high-interest loans or dip into retirement savings to make ends meet. Emergency savings funds would have helped ease those debts.

Smrecek said he's seen increased interest among HR executives in offering emergency savings funds as an employee benefit. "One of the key takeaways from the pandemic was the value of having emergency savings," he said. "We're seeing more employers focus on this from a number of perspectives, from simply promoting savings for rainy days to creating a way for employees to do that directly from paychecks to creating solutions that are built into broader benefits packages."

Value of the Human Option

While a digital platform can meet many of employees' financial wellness needs, experts say providing an option for human support remains essential, whether that be a live chat option on a website, a Zoom call or an in-person meeting with a counselor.

One-third of respondents to the PwC survey ranked access to unbiased human coaches as the employer benefit they'd most like to see added to their organization's wellness offerings.

"There can be a real benefit to pairing digital platforms with some form of one-on-one coaching to help achieve lasting behavioral change," said Christine Randazzo, co-lead of PwC's reward and benefits practice. 

BrightPlan is among the platforms that uses such a hybrid approach, offering a combination of digital tools and human advisors to capitalize on the strengths of each support option.

"Many employees prefer the do-it-yourself features of technology, but when they have a more complex financial question, they can easily reach out to a human advisor," Robinson said.

Randazzo believes using human counselors also can help address one of the biggest challenges companies face regarding financial wellness initiatives—convincing employees to stick with using these resources over the long term.

"If employees develop relationships with someone who can motivate them and keep them accountable, that can help sustain practices over time," Randazzo said.

Dave Zielinski is a freelance business writer and editor in Minneapolis.