It’s working! Employees who regularly use financial wellness tools year after year are improving their money situations, new research shows.
In an analysis of companies who have offered financial wellness benefits since 2015, Financial Finesse found significant improvements in the finances of employees who repeatedly take advantage of the programs.
Recurring participants appear to be “benefiting from a compounding effect, where gains in financial health grow over time,” according to the firm’s Think Tank 2017 Year in Review report.
“Compared to new users, repeat users are more confident investors, twice as likely to be on track for retirement, and nearly half as likely to have unmanageable financial stress,” the review noted.
Financial Finesse believes the most successful programs take a holistic approach, promoting multiple methods of engagement.
Among employers who have had multi-channel (i.e., online, workshops, over-the-phone and in-person) financial wellness programs in place for at least three years, research demonstrated:
- The average Financial Wellness Score of repeat users improved 22 percent from their first assessment to their last. Researchers predict this would result in an average gain of more than $500,000 per year to a 10,000-employee company from reduced absenteeism, wage garnishments and increased tax savings from contributions to HSAs and FSAs.
- Forty-three percent of repeat users are on track for retirement, compared to just 19 percent of employees who are engaging in the financial wellness benefit for the first time. Delayed retirements can be expensive for companies, as research by Prudential suggests the average cost may amount to over $50,000 per employee per year.
- About one in seven repeat users report high or overwhelming levels of financial stress, compared to one in four new users. Reducing financial stress from debt reduces employee health care costs by lowering the frequency of chronic health problems like diabetes and heart disease, based on surveys conducted by the Associated Press and AOL.
- Sixty percent of repeat users are confident their assets are allocated correctly, compared to just 39 percent of new users.
- Employees keep coming back. Repeat users have increased from 33 percent of total financial wellness benefit users in 2016 to 58 percent in 2017.
“Early adopters of comprehensive workplace financial wellness programs, which include unbiased financial coaching, have proven successful,” Think Tank Director Greg Ward, CFP, said in a statement. “From our experience, trying to address employee financial wellness with a technology-only approach has had limited success, which may have contributed to the recent shutdown of several financial technology companies.”