Financial wellness improved for the average American employee in 2016, aided by an increase in the percentage of repeat usage of workplace financial wellness programs, according to Financial Finesse’s 2016 Year in Review report.
Repeat users in 2016 recorded higher levels of financial wellness in cash flow and debt management, retirement preparedness, and investment confidence. The average overall employee financial wellness score improved to 5.4, up from 4.7 in 2015.
Repeat usage of workplace financial wellness programs is gaining momentum, the report notes. Repeat users made up 29% of all users analyzed in 2016, up from 16% in 2015, 15% in 2014 and 6% in 2013. Thirty-eight percent of repeat users reported they are on track for retirement versus 23% of new users. In addition, in their first assessment, 18% of repeat users said they are on track to reach their income goal in retirement. In their last assessment, 39% of repeat users said so.
The majority of employers represented in Financial Finesse’s sample use a variety of techniques to drive employee engagement in their workplace financial wellness program, including:
- Marketing their financial wellness program as an employer-paid employee benefit;
- Positioning financial wellness as a key component of an overall wellness program;
- Offering wellness incentives to participate;
- Offering unlimited one-on-one financial consultations via phone, in-person, or both; and
- Marketing the financial wellness program as part of other benefits communications, such as displaying information prominently on the internal employee benefits site and reminding employees during open enrollment or benefits changes that coaching is available.
Twenty-seven percent of employees who took a financial wellness assessment in 2016 reported being on track for retirement, up from 19% in 2015. Despite this improvement, employees across the board aren’t saving enough to meet retirement needs. Ninety-two percent reported participating in their employer-sponsored retirement plan, but only 77% are contributing enough to earn the full employer match. The problem of retirement under-preparedness continues to be systemic, with insufficient percentages of virtually all demographic groups saying they are on track for a comfortable retirement.
By demographic, 33% of men reported being on target for their retirement goals, and 25% of women reported being on target. Twenty-two percent of employees younger than 30 said they are on track for retirement; one-quarter of those ages 30 to 44 are on track; 29% of employees ages 45 to 54 reported being on track; and 36% of those ages 55 and older said the same. NEXT: Retirement projections, and differences between low and high financial wellness levels