PricewaterhouseCooper's (PwC's) 2018 Employee Financial Wellness Survey shows that 47% of workers in the US have financial stress. This number is even higher among Millennials at 53%. How does this stress impact companies? Nearly half of employees spend three or more hours every week dealing with these financial worries. Additionally, more than a quarter of employees say their work is impacted. In essence, companies save money when their employees are financially sound.
That's why employee wellness is a big focus. Money management training, however, needs to go far beyond retirement. Employees state that they need help managing student loan debt, figuring out a monthly budget, investing, insurance, estate planning, and education planning.
Is It Working?
The same PricewaterhouseCooper's survey shows that nearly two-thirds of employees have used their employer's financial wellness program and found it helpful. When asked for specific ways these financial programs helped, 41% reported the program helped them get their spending under control. Other significant ways financial wellness programs helped were:
- Prepare for retirement - 39%
- Get out of debt - 31%
- Save for major goals - 27%
- Manage investments - 23%
More important than the number of people using the program is whether the program helps those that take advantage of it. Based on the analysis of iGrad and Enrich user activity in May 2018, there is a positive correlation between the number of badges earned, articles read, and videos watched with higher post-test scores. Higher post-test scores correlate to stronger financial health.
So, the question becomes, how can employers encourage their employees to use their financial wellness program? First, employers need to adequately publicize the program to employees. Then, they need to offer incentives.
Create a Plan for Publicity
The key to a successful financial wellness program rests with internal communication with the employees. That's why it is imperative to develop a plan that lets employees know that the program exists, how they can participate, and why it matters.
If possible, companies should begin by talking with their employees about their financial needs and what they'd like to see in an employee financial wellness program. This kind of grassroots participation encourages employees to "buy in" the process. Those that are most excited about the program can become spokespeople to help get others excited.
Next, companies want to be sure that those at the top are enthusiastic about the financial wellness program. This can be accomplished by letting all levels of management know about the benefits of workplace financial wellness. According to the PWC survey, 43% of those stressed about finances feel that financial concerns are a distraction at work, while only 9% of employees not stressed about finances feel the same way. The same holds true for productivity and work absences. This way, as managers begin to use the financial wellness program, they will communicate to others in word and deed that employee financial wellness is important to the company.
Most importantly, employees need to understand the objectives of the financial wellness program. This includes knowing how and when success will be measured. This part of the plan requires regular communication. Such communication should include:
- Community events encouraging financial wellness
- Discounted opportunities for financial products
- Highlights of program success
Use current internal communication and social media to promote the program. HR managers should be careful not to overwhelm their employees with too much communication. This will result in many unread announcements. Instead, piggyback financial wellness program promotion onto existing communications such as weekly newsletters or updates.
Finally, be sure to celebrate when goals have been met. Achieving goals encourages others to participate, too. For other tips on creating the best financial wellness program for your organization, download our Financial Wellness Best Practices Guide.
Companies with successful financial wellness programs understand that more communication equals more participation. However, they also recognize another component of participation. Incentives.
Incentives Increase Participation
As shown by an Enrich case study, one way to get greater adoption of a financial wellness program is to provide incentives. A company with 52,000 employees agreed to contribute $250 to each employee's HSA account if they met the requirement to complete five of the nine financial wellness courses. Although the statistics prior to the session were good, usage statistics after the session were significantly better:
|Before Incentive||After Incentive|
|Sessions per Month||6,277||9,424|
|Pageviews per Month||26,777||95,819|
|Pageviews per Session||4.25||10.17|
|Avg Time per Session||8:02||14:18|
Although the purpose of the financial wellness program is to get employees to adopt and maintain healthy financial behaviors for the rest of their lives, first they must internalize these behaviors. Rewards for participation help transition employees from external incentives to an internal understanding.
Employees rarely adopt and maintain healthy financial behaviors all at once. Instead, changes happen in stages. First employees contemplate the correct behaviors. Then they prepare to adopt them. Eventually, action occurs until finally, maintenance is achieved.
Employees starting a new financial behavior typically lack intrinsic motivation to maintain the behavior because they do not yet know the rewards the behavior will bring. Adding an incentive to get employees to act is a great way to nudge people to act and move toward maintaining new behaviors. Then as the employees begin to enjoy the benefits of the new behavior, they will adopt these behaviors for life.
Most employer financial wellness program incentives are benefits-based or outcomes-based. Benefits-based incentives have a great impact on employee participation. These incentives are available to all employees who do what is required to earn the reward.
Keep in mind that the dollar amount of the incentive needs to be high enough to motivate employees to participate in the financial wellness plan. However, the requirements to get the incentive need to be substantial as well. This makes the work needed to achieve the incentive meaningful.
Some possible benefits-based incentives include:
- $50 to $100 for enrollment in the financial wellness program
- $50 to $100 for completing a specific number of requirements
- $100 for completing a personal financial health action plan
- Bonuses and/or merit pay increases tied to participation
- $100 for completing a financial wellness class
- Flex benefit credits
In addition, benefits-based incentives should include some short-term rewards that all who participate may win. These include drawings and raffles.
Outcomes-based incentives reward employees for healthy financial behaviors. Most outcomes-based incentives last several years. Each year that an employee completes the necessary tasks, they are rewarded. Often, points are rewarded for completing certain tasks. At the end of a given time period, points are redeemed for prizes.
With such an emphasis on employee wellness, companies need to ensure that their employees participate in their financial wellness programs. Without participation, such programs are both a waste of time and money. Communication about the program and incentives to complete specific activates will help ensure a successful program that helps employees increase their financial health and increases the bottom line for the company.
Last but not lease, consult an expert. We specialize in building successful financial wellness programs, so make sure to subscribe to our monthly newsletter or contact us to help your organization with its own financial wellness program.