“My hope is that financial wellness becomes an integral part of an employer’s overall strategy, fully integrated with other efforts of health and well-being. Plans should be comprehensive, with employers measuring the impact of efforts so that programs can be made sustainable over time. Success stories should be shared with them as examples of what other companies are thinking of and implementing for their employees. The trajectory we are on now is good and I think we can get there in five years.”
— Kristie Howard
It has been shown that financially stressed employees can be less focused and productive, causing a number of increased expenses that affect company bottom lines. Therefore, employers have a vested interest in promoting and supporting financial wellness programs that provide both the education and tools employees need to stabilize personal financial situations.
However, the question must be asked, how do companies gauge the success of such programs?
The success of financial wellness programs can be monitored by developing a series of benchmarks that can be used to track progress throughout the journey. Although the needs of companies can be vast and diversified, the opportunities to improve employee financial wellness are also numerous.
In a nutshell, the goals of financial literacy programs are to improve the financial, physical, and mental conditions of workers so that maximum attention and effort can be exerted at the workplace. Benchmarks ensure that programs are on track for reaching these goals.
Benchmarks should be created in a manner that fits the financial needs of each company’s employees. They can include readily available data gleaned from company records, such as fluctuations in healthcare costs, financial assistance requests, and retirement plan savings.
Surveys and questionnaires can be conducted along the way to determine if employees are maintaining or losing interest in program efforts, increasing or decreasing personal debt and emergency funds, and utilizing other outside retirement savings vehicles.
Changing the Conversation
The majority of Americans are not receiving the financial education they need and, as a result, they are making poor financial decisions that are affecting them in both their personal lives and their employment.
People have an overall desire to gain enhanced financial information that can help them decrease financial stressors in everyday life as well as overcome the distractors of saving for their retirement futures. However, the majority do not know where to turn for that help.
Employers, therefore, are in a unique position to meet this important need. However, employers must first change the conversation by offering and endorsing financial wellness programs in the workplace. Workers are increasingly looking to their employers for assistance with navigating their journey toward a happier and financially healthier retirement future.
To effectively meet this challenge, employers and financial providers need to team up. Together, employers and providers can target and prioritize financial needs, monitor and review employee activities, and encourage employees to self-educate.
Throughout the journey, advanced technological tools can be provided to maximize results, both by the employees utilizing them and the companies initiating the financial wellness programs. The Internet, of course, offers a wide assortment of e-tools, which are convenient and preferred by a majority of employees. Such tools can be applied to both address immediate employee issues and to limit company expenses.
It has been shown that change is needed away from a singular focus on retirement savings to a more holistic program approach. Poor spending and savings habits for immediate needs should be corrected, and include decisions based on sound financial principles. By seeing retirement as a journey, employees can better overcome current financial problems and better prepare for future retirement.
If a company is going to invest in financial wellness for employees, it’s worthwhile to invest a portion of the budget and the time needed to measure its success. This doesn’t have to be a very difficult or complicated set up, but it is vitally important. A company will only know how far its employees have come if it knows where they started.
Mark Singer, CFP®, AIF® is the President and Co-Founder of Financial Literacy Toolbox. Mark is a leader in the world of financial education. Mark is the author of three books, a frequent speaker at events, and is the creator of The Financial Literacy Toolbox, a virtual resource center to help financial advisors, wellness providers, and institutional retirement services firms change the conversation about financial wellness.