Financial wellness programs have exploded in popularity among employers within the last couple years, new research by Prudential found.
In its survey Benefits and Beyond: Employer Perspectives on Financial Wellness, Prudential discovered 83 percent of employers are now offering financial wellness programs. Just two years ago, that figure was a mere 20 percent. Another 14 percent plan to adopt such a program in the near future.
So, what’s the draw?
Those surveyed intend for their benefits packages “to attract and retain talent, improve employee productivity and assure employees that they care about their financial well-being.” And incorporating financial wellness appears to be a win-win.
“Our survey reveals that employers and employees report higher satisfaction with their benefit plans when financial wellness programs are offered,” Vishal Jain, financial wellness officer for Prudential’s Workplace Solutions Group, said in a statement. “Employees increasingly look to their employers to help them achieve financial security, and employers are seeking data and insights on how to respond and influence better outcomes.”
Most employers said they chose their financial wellness program based on its price tag, how easy it was to roll out and the breadth of the financial expertise offered. They said program success was monitored largely through employee feedback. “Analysis of internal data around 401k loans or withdrawals, as well as wage garnishments,” were cited as additional measurements.
Moving forward, there is hope “big data could help measure results, customize programs and fill remaining gaps,” according to Prudential. However, the survey found 61 percent of large employers named data sharing to be the biggest barrier to participation. In particular, concerns about privacy may be deterring some. For others, rounding up all the necessary financial information seems too cumbersome.
Regardless, many employers are proponents of benefits. Six in 10 believe they should provide them, and those who include financial wellness programs report more satisfaction with their total benefits package (61 percent) compared to those who do not (44 percent).
“Employers recognize the best way to support employees is to understand their needs,” Jain said. “As financial wellness becomes the rule rather than the exception, financial services providers that can use data to help employers develop better programs and communications for employees will be increasingly valued.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
