Why Does Employee Financial Wellness Matter?
Employers are increasingly providing their employees with more choices when it comes to retirement planning, health care, and other benefits. Offering a range of options is important, but the true key to any effective benefits program is to ensure that employees have sufficient information, education, and tools to make smart decisions about their benefits. While increased choice and greater flexibility may empower employees to craft a personalized strategy for their unique situation, the reality is that the vast majority of Americans are woefully unprepared to make those prudent decisions. When your employees lack education and are not financially fit, your organization can suffer.
Consider these facts…
1. Not surprisingly, in 7 years of research – working with nearly 1,000 employers and some 200,000 employees conducting Financial Fitness Assessments – the Financial Fitness Group has found the average employee scores only 62% in understanding basic terms and terminology related to personal finance, retirement, and other benefits.
2. Research suggests that the average amount of stress on the American employee costs employers over $300 billion each year in lost profits and productivity.
3. According to the findings of both the Society for Human Resource Management and the American Psychological Association, the top cause of stress is financial worry – and that worry affects over 80% of employees (The Wall Street Journal).
The Employer’s Role in a Financial Fitness Strategy
Assess Your Employees
As with any business strategy, the first important step is analyzing the current circumstances. Whether you have an existing financial wellness program, or you’re exploring the concept of adding one, it’s prudent to take an honest and comprehensive analysis of the challenges – and opportunities – that come with promoting financial fitness of employees. Conduct an assessment of your employees’ financial knowledge, attitudes, beliefs, and behaviors about money. This will not only allow you to get a picture of the current situation, but will ideally provide a benchmark to compare your organization against national norms – and see what a financially fit workforce looks like. Luckily, unlike biometric screenings, conducting a comprehensive financial fitness checkup of your employees can be relatively simple. There are a variety of tools available that allow you to analyze and benchmark your population. Research different options to find one that will assist you in collecting the information you need to found a solid strategy.
With the data you collect from the financial fitness checkup of your employees, you’re in a good position to determine which solutions make the most sense for you and your staff. Do your employees have a broad range of needs, or are they struggling in only one area? Do they prefer in-person education, or do they like to learn online? You might consider offering financial fitness classes with a professional instructor. Is there a strong desire for personalized training? You may find that your employees like the flexibility and convenience of using online tools, but also want more personalized training and feedback in the process. There are a host of options available to supplement your in-person efforts with more interactive, personalized digital resources for your employees. Utilize the data from your financial fitness assessment to guide you in building an appropriate strategy that meets the needs of your population.
Get Ongoing Feedback
Regardless of which tools and approaches you build into your financial fitness strategy, it’s critical to seek ongoing feedback from your employees. A good way to do this is to conduct regular financial fitness checkups – these will look similar to your original financial fitness assessment, but on a smaller scale; allowing you to record progress, discover pain points, and assess what’s working and what’s not. It’s also beneficial to identify key metrics that you want to track, measure, and influence over time. Finding clear and visible ways to track progress will motivate you to stick to your organizational goals. Look for solutions that have built-in metrics to help you measure the impact of the programs you implement for positive change.
Set Your Employees Up for Success
As you explore the journey to assess and ultimately change the financial fitness of your population, understand that as an employer, one of your key roles lies in crafting an effective communication strategy. It’s up to you to make your employees aware of – and more importantly, encourage them to use – the tools, resources, and services you provide. As you start on this journey, look to join online groups and forums and collaborate with others to learn more about effective strategies.
If you choose the route of working with a vendor, be sure to find someone who can provide you an independent, unbiased, and tested approach. It may be tempting to rely on the existing vendors who already provide you with financial products such as your retirement plan, voluntary benefits, or other insurance products. In crafting your financial fitness strategy, it’s important to engage experts who don’t have a vested interest in selling financial products or services to ensure they are focused on best serving the needs of your employees and your organization.
Today’s employers often use benefits programs effectively to help recruit, retain, and engage happy and productive employees. Considering that the average employee stresses over money and lacks formal education around topics like personal finance and retirement planning, a holistic strategy to promote employee financial wellness is critical to these efforts. As an employer, you play an essential role in developing a financial fitness strategy for your organization. With the right tools and resources, you can accurately assess your current population, choose personalized solutions to fit their needs and collect feedback to track your goals and employee engagement. A supportive employer not only offers employees an array of benefits choices to fit their diverse needs, but also sets employees up for success in reviewing and choosing the right benefits for themselves and their families.
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Andrew Meyer, CEO at Financial Fitness Group.