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Navigating financial wellness options is necessary to create effective programs
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 (forthcoming), 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.
As of this year, 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.
Financial Advice Benefits Trending Upward
(Click on chart to view in a separate window.)Source: SHRM
2017 Employee Benefits survey report (forthcoming).
"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]
For employers tackling financial wellness, Dearing recommends the following process for cutting through the confusion:
Step 1. Define Financial Wellness
Financial wellness can include:
"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:
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:
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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