Hey, financial wellness really works if you do it right!
In its recently released 2019 Financial Wellness Year in Review (YIR) highlighting the current state of financial wellness, Financial Finesse evaluated how the type of engagement—online, group, and individual—influences change in financial wellness.
The study revealed employees that followed the best practice model and engaged in all three channels of learning:
- Had a 43% higher retirement plan deferral rate and an 81% higher annual contribution to a health savings or flexible spending account than employees that engaged exclusively online.
- Fully engaged employees contributed on average 9.18% to a retirement plan and $1,565 a year to a tax-preferred savings account, compared to online-only employees who contributed on average 6.43% and $866 a year, respectively.
- Improved their financial wellness score on average 1.44 points, outperforming group learners by 31%, and online-only learners by 83%.
- Recorded a 29-point drop in the percentage that have high or overwhelming levels of financial stress, from 70% to 41%.
“These results are astounding,” said Financial Finesse Founder and CEO, Liz Davidson. “What is even more remarkable is the speed of improvement. Employees with poor financial health exhibited significant improvement within three years of engagement.”
The good news for employers, Davidson adds, is that “while we’re seeing signs of increased financial stress in the wake of COVID-19, the best practice model yields the greatest improvement for the most financially stressed employees in the least amount of time. These results could not have come at a more critical moment in history.”
The 2019 YIR study also revealed that while the financial health of the average American worker remained steady over the past three years, the percentage who reported struggling with debt, lacking investment confidence, and having an unmanageable level of financial stress was already on the rise even before COVID-19 hit.
Given the strong correlation between financial stress and employment costs, the YIR study explains why and how employers should focus their COVID-19 relief efforts on providing targeted support to their most financially stressed employees.
“Not only should employers offer financial wellness benefits because it’s the right thing to do,” says Greg Ward, Director of the Financial Wellness Think Tank and co-author of the study, “but because employment costs also drop significantly when financial wellness levels rise.”
At a time when every single dollar matters more than ever to both employers and employees, Ward says “focusing on financially stressed employees who show the most improvement in the least amount of time is mission-critical for both parties to endure this pandemic.”
To successfully target this population with the critical resources, in the right way at the right time, Ward recommends using a workforce financial wellness assessment that identifies segments of the population who are suffering the most and highlights their most significant financial needs.
Financial Finesse is hosting a live virtual discussion of the YIR report with Davidson and Ward from 10-11:30 a.m. Pacific time on Tuesday, May 12. Interested parties can register for the event here.