The number of employers that offer financial wellness programs through the workplace is expected to nearly double within the next few years, according to research from MassMutual.
The MassMutual Financial Wellness Trend Study finds that 42% of employers currently offer financial wellness programs. Another 19% of employers are in the process of implementing programs and 19 percent say they plan to introduce wellness programs within the next three years.
The reason, of course, is increased concern about workers’ personal finances.
“Financial wellness has become a huge priority for employers across the country as Americans struggle with managing a wide variety of financial issues from paying down credit card debt and handling emergency medical expenses to saving for retirement and planning for long-term care,” Una Morabito, Head of Client Management for MassMutual, said in a statement. “In response to employers’ concerns, we now offer more tools, resources and solutions to help Americans better cope with their personal finances.”
The bigger the employer, the greater importance placed on financial wellness.
Overall, 86% of employers characterize financial wellness programs as “important.” The importance of wellness programs ranges from 72% of smaller employers (fewer than 25 workers) to 94% of larger firms (1,000 or more workers).
Employers have several motivations for offering financial wellness programs. The chief motivation, 90% of employers report, is they “really care about their employees.”
Eight in 10 employers also said the opportunity to support employees at a minimal cost while being on the “cutting edge of benefit offerings” and gaining an advantage in hiring talent were also contributing factors.
Holistic solutions preferred
When asked what an effective financial wellness program should comprise, 47% of employers said a program should address an employee’s full financial picture. Others pointed to combinations of retirement, insurance, education benefits and advice.
Other popular components included credit/debt counseling, help with medical costs, and childcare and eldercare.
The right tools
While many employers point to the need for online financial planning tools as essential for an effective financial wellness program, many were dissatisfied with their current tools. Nearly two in 10 of employers said online tools were the least successful component of their program, according to the study. But the story does not end there.
Employers were also asked to react to a description of a holistic financial planning tool that would enable them to load information about their personal financial situation—including income, expenses, debt, retirement savings, and insurance—as well as their goals.
The tool would then use the information to help employees prioritize their goals and provide simple, concrete steps to realize them. A majority of employers (58%) report wanting to offer the tool and characterize it as useful.
Success at work
The most popular components of a financial wellness program were retirement (90%), online retirement tools (86%) or financial planning tools (86%), protection products such as life, disability and medical insurance (82%) and access to a financial advisor for financial planning (77%) or retirement planning (76%), the study finds.
What do employers say is the most successful at helping employees with financial wellness?
Forty-three percent point to communications, including from human resources (26%) or upper management (17%), the study finds.
A third (32%) say financial rewards, including discounts, cash awards, and free credit reports, drive participation.
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.
