Pulse Check: How Healthy Is Your Workplace Financial Wellness Program?
A New Study Suggests that CEO’s and Business Owners Can’t Answer that Question
If a Financial Wellness Program is part of your current employee benefit offering, take a look at this eye opening new study by Bank of America and Merrill Lynch. (And if you’re currently considering a financial wellness program, take a long look. The findings and recommendations revealed in this study could help you avoid some of the serious flaws found in many of today’s programs.) The study, based on surveys of 667 employers who offer 401(k) plans and 657 employees who participate in them, echoes the informal feedback that many of us have already heard: the idea of an employer-provided Financial Wellness Program is very appealing.
But somehow, participation in – and therefore, a positive experience from – such programs is frightfully low.
Here are some insights into what’s going on.
Financial Wellness Programs Are Strongly Desired by Employees
Today’s employees want help in gaining or maintaining a higher degree of financial well-being and health. In fact, nearly 2 out of every 5 employee respondents (38%) described themselves as “less than financially well.” And a whopping 86% of employees say they would likely participate in a Financial Wellness Program if it were offered. Yet, according to this study, fewer than a third of those (31%) who were offered such a program actually participate in it.
Why? Turns out, employees who have a Financial Wellness Program available to them simply cannot see the value of participating in it because, it seems, the program offered doesn’t appear to have much value. More than half the reasons employees gave for non-participation were: “Don’t offer services of interest to me,” “I want more personalized help,” and even “I’m too busy.”
Is this a problem with faulty program design? An issue with poor internal marketing and communications? It’s probably a little of both.
For starters, employers and their employees have very different program goals for such a program. The study points to a startling disconnect between the two groups – even on something as basic as how they defined what it takes to achieve “financial wellness.” When employer respondents were asked how their program could most help improve their employees’ financial wellness, they said, “considering the impact of employer benefits on overall personal finances.”
By contrast, their employees – the people these programs are designed to help – say they’re looking a program that helps them “focus on the single next thing to do – one step at a time.” For these people, the program you’re offering looks like generic, cookie-cutter advice. But what they want is individualized help in tackling their financial concerns and achieving their longer-term aspirations. On the face of it, your program just doesn’t look like something worth the time and effort of signing up. That’s a shame. And it’s a hefty waste of your investment because, in fact, 91% of those employees who do participate end up saying that the program resources were effective.
So, what can you do to boost enrollment?
One quick piece of advice on what not to do: don’t just repackage the same old program. The people who have stayed away probably did so for good reason. Before you boost your internal promotional efforts, start by asking your employees what they really need. Listen to those needs. And create solutions that address the needs of more finely targeted groups. As you read through the study, you’ll note stark contrasts between different demographic groups. Women, for example, identify themselves as significantly more concerned about their current financial well being and are more worried about “outliving” their financial resources. And your younger employees say they’re doing less financially well and struggle more than their older counterparts.
And how can you turn your Financial Wellness Program into a more powerful Employee Retention tool?
Talk to them, ask them, listen to them! Seriously, one of the strangest findings of the entire study was the fact that fully 70% of employers do NOT have formal measurements in place to help them gauge what’s working, what isn’t, and what will work better. Again, why? (Come on, don’t you measure just about everything else?)
It’s tough to improve something if you never define what it should deliver, what it currently delivers, what’s causing the gap – and what you need to do to fix it. Formal, anonymous employee surveys are a smart start. So are informal conversations with as many employees as you can get to chat with you. And so is reading up and shopping around. Employee Financial Wellness Programs are still in their youth and the program you may have chosen a few years ago might be woefully obsolete today. By delivering better tools, education and access to individualized support, you’ll improve the financial wellness, confidence and productivity of your employees and jump ahead of your competition in the battle for top talent.