Most Employers Don’t Consider Their Financial Wellness Programs ‘Holistic’
Employers surveyed by the Employee Benefit Research Institute (EBRI) noted that they face many challenges in offering financial wellness initiatives.
Approaches to financial wellness programs vary widely, according to a survey by the Employee Benefit Research Institute (EBRI), ranging from third-party emergency assistance programs to one-on-one sessions. However, few are currently considered “holistic” programs. Instead, the majority of employers characterized these programs as pilot programs (38%) or periodic or ad hoc programs (32%).
Firms that describe their financial wellness initiatives as “holistic programs” are more focused on the value of the programs to employees, are less cost conscious and are making bigger investments in their financial wellness initiatives. Nearly two-thirds (63%) stated that the value proposition to employees is their top consideration for offering financial wellness initiatives (vs. 36% pilot; 38% periodic). Just over one-quarter (27%) stated cost as a main consideration (vs. 61% pilot; 43% periodic).
Interestingly, these firms also tended to have fewer than 10,000 workers: 22% of employers with 10,000 or more workers described their approach as ad-hoc or periodic outreach versus 9% of those with fewer than 10,000. Firms with periodic initiatives were more likely to cite seminars, workshops, or group sessions (26%) and ad-hoc outreach (22%).
Employee discount programs such as for cell phones, travel, and entertainment; tuition reimbursement; and financial planning education, seminars and webinars are the most common financial wellness benefits offered—rating responses of 72%, 69% and 60%, respectively. Only about one in ten respondents offer emergency savings vehicles or accounts, debt management services, or student loan repayment subsidies or consolidation/refinancing services.
In-person individual sessions were the most likely method for both personalized financial counseling and credit and debt counseling programs, while in-person group sessions were utilized most often for financial education and incentivization programs.
Motivations to participate in financial wellness programs
Communication from human resource professionals was the number one way that employers encouraged employees to use the financial wellness initiatives they made available (39%). The second most common approach was monetary incentives, which may include discounts on insurance, small cash bonuses for signing up and free credit monitoring (19%). Internal champions and communication from upper management tied for third place with 13% each.
EBRI found those in the education industry (29%) or the government (28%) were more likely than those in finance to offer monetary incentives or financial rewards.
When it comes to championing the implementation of financial wellness initiatives, the most commonly cited primary champion was human resources (55%), followed by a senior executive (21%).
Challenges with offering financial wellness programs
Employers noted that they face many challenges in offering financial wellness initiatives. These included complexity of programs (44%), lack of staff resources to coordinate and/or market the benefits of the programs (43%), lack of interest among employees receiving the initiatives (43%), challenges in making an effective business case to management to justify the cost of the initiatives (42%), and lack of ability and/or data to quantify the value of the initiatives (41%).
Only 5% cited no challenges faced in offering these initiatives.
Most commonly, employers cited a mix of sources—such as employee assistance programs and contracted vendors—as the source of their financial wellness initiatives (42%). When only one source was cited, it was most commonly the retirement plan provider (33%). Education and government-run organizations were more likely to use a nonprofit or government agency partner compared to other industries.Measures used to evaluate the success of financial wellness initiatives ranged from specific (improved employee retention) to quite broad (improved overall worker satisfaction). Improved overall worker satisfaction was the top measure of financial wellness initiatives (39%), closely followed by reduced employee financial stress (38%). Worker satisfaction with the financial wellness initiatives and improved employee retention tied for third place with 33% each.
More findings from the survey may be found in this EBRI Issue Brief.
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