Cookie-Cutter Won’t Work for Financial Wellness Programs

It may seem obvious what financial help each generation needs, but when employers ask employees what they need, they may be surprised.

The right design of a financial wellness program and how a program will help employees and employers differs by organization.

“You can map out the location and average age group of an organization and usually guess what employees need most and what will have the best effect for the company,” said Alex Assaley, lead adviser retirement plans at AFS 401(k) Retirement Services, in a webinar sponsored by GuideSpark.

Budgeting, debt management, retirement planning and saving for health care are the top financial education needs of employees overall, he says, but plan sponsors need to get feedback from employees in order to know how to customize their financial wellness programs.

It may seem obvious that young employees just starting out need help with budgeting, or that pre-retirees need help with retirement planning, “but you may be surprised,” Assaley said. He noted that life events are what drive financial decisionmaking—getting married, purchasing a home, having a baby—so the best way to start is to spend time listening and learning from employees about their priorities.

Adam Potter, co-founder and president of SimpleFi, said, “We’ve seen employers are getting more sophisticated about what they are asking from financial wellness programs. We are constantly asked by employers to add different media for communications as well as different topics.”

Potter says financial wellness programs are a good benefit to offer because money problems cause employees stress. He noted that a number of research studies show financial stress distracts workers and results in lower productivity and engagement, as well as absenteeism. “It’s not always a fear of not having enough for retirement; it’s about making ends meet, day to day,” he said, suggesting that employers decide how financial wellness aligns with the mission and culture of their organizations.

NEXT: Barriers and tips for financial wellness programs

Employers have shown an increased amount of interest in offering financial wellness programs and resources, and a recent GuideSpark survey found that more than three-quarters (78%) of employees say they would choose to join a company that offers financial health benefits over one that does not. Assaley said a good financial wellness program sets goals, monitors progress and tracks results for both employees and employers. “It inspires employees but also helps show employers their return on investment [ROI] and how it drives success in their companies,” he said.

Measuring ROI is important, because, Potter notes, one of the barriers to offering a financial wellness program could be how to fit it into the company’s budget.

However, Assaley said, it is usually well worth the commitment.

Another barrier, according to Assaley, may be a lack of resources within the company, but employers can use advisers or financial wellness program providers.

Companies can use different resources for different topics, such as a budgeting expert or student loan financing expert, Potter added.

Assaley pointed to employee engagement as one of the biggest challenges. “If you have a leader at the organization who will champion the program, you'll get more buy-in from employees,” he said.

He said employers need to make financial wellness programs fun and easy, and Potter agreed, noting that technology can help facilitate this.

Assaley said, in particular, younger employees like to consume information in quick pieces, as through Twitter, Instagram or other social media. However, other demographics may want a human touch.

Further advantages of using technology for financial wellness programs, according to Assaley, are that it can help scale the program, make the lives of human resources (HR) staff easier, and provide privacy for employees who do not want to share financial information with their employers.