Giving Employees the Financial Wellness Help They Want

Offering an array of benefits—addressing both physical and financial wellness—and implementing personalized experiences will set employees up with what they need.

Employees are expressing a need for financial wellness help.

A Franklin Templeton survey found that while workers today place nearly equal importance on mental (81%), physical (80%) and financial (76%) health, they feel least in control of their financial health (55%) as compared to physical (62%) and mental (58%) health.

Nathan Black, vice president of consumer-driven health at Voya Financial, notes that the coronavirus pandemic has exacerbated financial insecurities among the employed and the unemployed. “The pandemic has overall heightened that focus, where people are realizing that having financial security is really critical in terms of insulating them over the shocks we’ve seen in the past 18 months,” he explains.

Many respondents in the Franklin Templeton study said they struggle to find a holistic view of their financial picture, with 61% indicating they need to consult many sources to get an overall view of their finances, and 51% stating it is too complicated to integrate all their financial information and goals into a single picture. Additionally, 70% say they would like a “Fitbit-like program for their finances” to easily track everything in one place.

As a result, more employees than ever are asking their employers for financial well-being benefits, including incentives. Three out of four employees in the study said they want their workplace to provide more resources to help them with their overall financial well-being, and 79% said they believe their employer should provide incentives for good financial habits, with 78% saying the same about incentives for good health habits. 

“As the Franklin Templeton survey shows, employees want their employers to provide more resources that tie mental, physical and financial well-being together to help them improve their overall well-being,” says Christian Mango, president of Financial Fitness for Life. “They acknowledge that financial well-being is not just about money, but is also about their health and lifestyle. Employees want help visualizing their long- and short-term goals throughout each phase of the employee lifecycle.”

Technology and Guidance to Increase Personalization

Mango encourages employers to consider hiring a financial coach that suits employee needs and to use a single technology platform for all benefits. “If you are looking for an approach that truly engages a large percentage of the employee base rather than simply checking the box, then we know that the only effective way to do that is through a combination of a well-being/financial benefits coupled with the right technology,” he says.

As technology evolves, more participants are demanding access to personalization features on a web or mobile platform, especially when it comes to dealing with their finances. The Franklin Templeton study found 73% of employees expect financial management apps and programs to use their information to suggest appropriate resources, while 62% say that unless they are receiving personalized recommendations, financial education is not helpful to them.

Mango says curated messaging, content and action steps are vital to expanding financial wellness among employees. Using a well-being or financial coach will also build participants’ relationships and trust, as well as offer an accountability partner throughout their financial journey, he says.

Jordan Feldman, co-founder and CEO of Rightway, says he believes providing access to benefits without any guidance fails employees.

“This is where technology in addition to expert, human support comes in,” he says. “By providing real-time responses at the touch of a button, care navigators streamline the process for employees, making the end result much smoother, aligning with their expectations as consumers.”

Financial Freedom Over Retirement

Concerns about a lack of financial resources and emergency savings accounts intensified throughout the pandemic. Now, according to Franklin Templeton, employees are learning from their experiences and prioritizing financial freedom over retirement. Eighty percent of respondents in the study described the traditional idea of retirement as “no longer accurate” for most people’s expectations or experiences. Three-quarters also signified a large difference between their future financial goals and plans now compared with five years ago.

Employees are shifting their interests to financial freedom not because they don’t care about their retirement anymore, but because financial freedom is more empowering, Mango says. “It allows employees to make choices about their long- and short-term goals,” he notes.

However, a Voya study found employees are focusing on their retirement more because of the pandemic. That study found six in 10 Americans noted the pandemic has encouraged them to plan for retirement.

“There is an understanding that there are multiple ways to optimize spending,” says Black. “There is more of an emphasis now on all of the things you should be doing in order to improve financial wellness.”

Instead of offering siloed approaches, Black encourages employers to provide holistic benefits that emphasize personalization and financial limits. “The push that we’ve been focused on is providing really broad-based support that takes into account financial constraints that the individual has.”

Instead of pinpointing one benefit such as retirement or health care, Black foresees a move that will encourage interaction between all benefit offerings. Case in point—using a health savings account (HSA) for expenses in retirement. “As we think about changing a health insurance election, oftentimes we see people free up several hundreds of dollars, and often it’s better for them to reallocate that into an HSA or into a retirement plan,” Black says.

Feldman expresses a similar viewpoint, saying more employers are using health care to encourage retirement savings and spending reductions among participants, as health costs go hand-in-hand with financial freedom.

“Surrounding plan members with the right resources and support to make better care choices—high-quality and cost-effective providers—lowers their yearly health care spend,” he says. “Many times, employees have little understanding of what a service will cost or why they are being charged, [but] education and advocacy can be provided by an expert who understands the ins and outs of the health care system.”