Employers Are Beefing Up Financial Wellness Programs

The coronavirus pandemic has exposed workers’ need for financial coaching and for employers to offer resources.

Providers of financial wellness programs say the coronavirus pandemic is prompting many employers to enhance their financial wellness programs, as many people —and even many businesses themselves—are facing financial stress.

“There has been a tremendous increase in employers’ interest in financial well-being,” says Shane Bartling, senior director, retirement, at Willis Towers Watson. “Areas where they are focusing first are on the low-hanging fruit—better promoting their existing resources, that being service from their defined contribution [DC] vendors and their advisers. In a survey we did, more than 80% said that was an action they have either taken or are considering.”

More than half are creating financial well-being teams to promote existing benefits, he says.

“Employers are very eager to address their workers’ widespread anxiety around what is happening and to find ways to demonstrate the employer’s support for the well-being of their workforce in this difficult time,” Bartling continues. “They are not only looking to expand usage of their available benefits but also looking to enhance their benefits. One-third of the respondents are looking to implement new financial counseling resources.”

One-third are also looking to make loans available to their workers, along with resources to help them build emergency savings, Bartling adds.

Half of employers are looking for signs of financial stress among their employees, such as more people taking out hardship withdrawals or loans from their 401(k).

He notes that these actions are remarkable, given the fact “benefits dollars are harder to come by than ever before.”

One of the biggest areas of deficiencies that the coronavirus crisis has uncovered is the “deficiency in the amount of cash people had set aside for emergencies,” says Pam Krueger, co-host of PBS’s “MoneyTrack” and founder and chief executive officer of Wealthramp. “There is broad demand among American workers for basic education on personal finance. That is the rock foundation underpinning everything. This is prompting more employers to look into how they can provide actionable one-on-one advice to their workers.”

In particular, Krueger says she thinks it is important to encourage workers in need of cash not to tap into their 401(k) but to take out a home equity line of credit if they have a mortgage.

Liz Davidson, chief executive officer and founder of Financial Finesse, says the reason employers are willing to enhance their financial wellness programs even at a time when their profits are suffering amid the pandemic is that they realize how financially stressed their employees are.

“Years ago, financial education was more focused on executives, providing concierge financial advice to retain them,” Davidson says. “The pendulum has swung to provide resources to those who are in the most financial stress, the most in crisis, to get them the information they need to get stabilized.”

Right now, Financial Finesse is concentrating on providing workers education, coaching people on the relief that is available from the government and prompting people to build out their emergency savings, Davidson says.

In fact, because discretionary spending is so curtailed by quarantine regulations in effect across much of the country, many people who are still working have the ability to save more, Davidson notes.

Financial Finesse is also encouraging 401(k) investors to remain invested, she notes. “We are trying to help them be more confident because the worst thing they can do is panic and move to cash.”