For all the buzz around financial wellness, a new survey suggests there is a long way to go.
These days there’s not much argument against the premise behind pursuing financial wellness. The notion is that bad financial health contributes to (and/or causes) a bevy of workplace woes: stress, which can lead to things like lower productivity; bad health and higher absenteeism; and even a greater inclination toward workplace theft, not to mention deferred retirements by workers who tend to be higher paid and have higher health care costs.
But if there is little argument that financial wellness is a worthwhile goal for workers – and one worth supporting by employers – the recent Financial Wellbeing Employer Survey from the Employee Benefit Research Institute (EBRI) suggests that we have a ways to go.
Here are some key takeaways from that survey of 250 employers:
1. HR is leading the charge.
The most commonly cited primary champion for financial wellness was Human Resources (55%), followed (distantly) by a senior executive (21%). Human Resources was also cited as the most common secondary champion of these initiatives (26%). Fittingly, then, “communication from HR” was the most commonly cited means of encouraging employees to use financial wellness initiatives (39%), more than double the next highest (monetary incentives, at 19%).
2. The need tends to be gauged by traditional measures.
The most common approach reported in evaluating a need for financial wellness was examining existing employee benefit/retirement plan data such as deferral rates, average balances and loan frequency/amount. Nearly two-thirds of respondents (63%) had taken this step; a distant (48%) second was surveying workers.
Dead last? Creating a financial well-being score or metric (14%).
3. Motivations vary by employer size.
Midsized employers – those with 2,500 to 9,999 employees – were most likely to say they offer these initiatives to improve their workers’ overall satisfaction (67%).
However, the largest employers (>10,000 employees) were most likely to cite increased employee productivity (37%) – and being a differentiator from their competitors (27%).
Size also matters in availability; three-quarters of firms with 10,000 or more employees offered financial wellness initiatives at the time, compared with (just) 49% of smaller firms.
4. Measures of success are varied – and (still) somewhat subjective.
Improved overall worker satisfaction scored as the top measure of financial wellness initiatives (39%), (very) closely followed by reduced employee financial stress (38%). Worker satisfaction with the financial wellness initiatives and improved employee retention tied for third place (33% each).
However, “improved workforce management for retirement” – cited frequently as a key ROI attribute – was mentioned by a mere 10%.
5. Cost is a key consideration.
Cost was the top consideration (50%) cited by employers in determining whether to offer financial wellness benefits – though a close second was interest among employees (46%).
Little wonder that cost loomed large since more than two-thirds (68%) of respondents stated that current or prospective financial wellness initiatives are or would be employer-paid – a figure that increased to 85% among those with a high level of concern about the financial wellness of their workforce.
6. Most employers are not (yet) spending a lot.
While there was a wide range in cost cited for financial wellness initiatives (bear in mind, there was also a wide range in the definition of what constituted a financial wellness initiative), 43% reported the annual cost per employee of current financial wellness initiatives as $50 or less – and a full quarter (26%) did not know the cost.
On the other hand, the one in five firms that defined their financial wellness programs as “holistic” cited an average cost of more than $500 per employee.
7. But then, the programs’ scope is (still) pretty modest.
Only about 1 in 10 of those surveyed offer emergency savings vehicles or accounts, debt management services, or student loan repayment subsidies or consolidation/refinancing services.
Employee discount programs were the most common financial wellness benefit offered. These include cell phones, travel and entertainment; tuition reimbursement; and financial planning education, seminars and webinars.
8. We’ve only just begun.
Despite all the “buzz” around the topic, a majority of the employers surveyed characterized their programs as pilot programs (38%) or periodic or ad hoc programs (32%).
Even among employers with a high level of concern about the financial wellness of their workforce, only about a quarter (27%) characterized their financial wellness initiatives as “holistic.”
A long way to go, indeed.
- Nevin E. Adams, JD
See also: “What Plan Sponsors Want to Know About Financial Wellness” and “Building a Bottom Line on Financial Wellness.”
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