Employers Turn to Financial Wellness for Workers

Large parts of the workforce are emerging from the pandemic in a financial crisis. Layoffs, reduced hours, costly medical bills, and the accumulation of unpaid rents and mortgages have made employees more concerned than ever about their current and future financial condition.

In a 2021 financial wellness survey by PwC, almost two-thirds of employees said their financial stress had increased since the pandemic began. Respondents who said their financial stress had escalated were almost four times more likely to admit that their finances were a distraction at work.

HR managers know that such concerns can also affect the mental health of employees. Some are introducing digital platforms to train and advise workers as they improve their financial condition and plan for a better financial future.

Changed focus of wellness technologies

Benefit experts say technology platforms are better suited to providing employees with 24/7 access to financial knowledge, goal planning, and decision support tools, and can be scaled for more cost-effective delivery of financial services compared to training or human financial advisors, and they can be scaled to provide wellness initiatives in large workforces.

Digital platforms also offer employees a level of privacy that other educational methods such as public workshops or presentations cannot. For example, the PwC survey found that more than 50 percent of financially stressed employees are reluctant to ask for help with their finances.

But while the best digital platforms give workers access to unbiased, relevant content, many technology providers are also recognizing the need to provide human advisors to answer more complex financial questions or to motivate and motivate employees to maintain their financial health over the long term to improve .

“This is often reflected in companies offering more financial wellness technology platforms and personal advice through virtual options,” said Mark Smrecek, senior director and leader in financial wellbeing at Willis Towers Watson, a global consulting firm specializing in benefits. “Employees can always get in touch with digital platforms, often with family or other members of their financial network, who can access the content with them,” he said.

Digital financial literacy content, goal planning and decision support tools are particularly in line with the preferences of millennials and Generation Z employees, say experts.

“People want it to be quick, easy, and automated,” says Devin Miller, co-founder and CEO of Secure, a digital platform that helps employees build emergency funds. “That means starting with the digital, and it’s no different with finance. The employees also don’t want any barriers and friction in a transaction. While people still enjoy interacting in person, the pandemic has forced those less inclined “to digital transactions to get used to and enjoy.”

According to Stuart Lawder, co-founder and COO of Smart Path, an Atlanta-based financial wellness platform, the technology is almost always available and available, which is of particular value in this time of financial crisis.

“Digital platforms are about increasing accessibility,” said Lawder. “We look at it in terms of time-to-value. Employees can often gain value faster by accessing resources through technology rather than waiting for workshops or arranging meetings with human advisors.”

Personalization promotes digital acceptance

Many financial wellness technologies have expanded their original purpose of promoting retirement plans or building college education funds to help employees manage expenses, pay off credit card or student loan debt, and build emergency funds, some of these changes being brought about by the effects of the pandemic.

Smrecek said his research shows that digital tools that help track expenses, manage debt, and build emergency savings can be particularly effective in helping employees struggling during the COVID-19 outbreak.

“Many digital platforms can now make it easier for employees to see what their personal balance sheet looks like in terms of earnings and expenses every day,” he said.

Top platforms are also using technology like artificial intelligence and machine learning to create personalized roadmaps for employees as financial wellbeing requirements vary based on age, job type, career plans, gender, and more.

Such personalization can be done through an assessment of an employee’s financial health, the use of analytics and artificial intelligence, Smrecek said, which increases the chances that employees will continue to use digital platforms over time.

“The likelihood that someone will use a technology a second or third time and then continuously is much, much higher if they immediately see or receive relevant information that they don’t have to search for,” he said. “Commitment is one of the most critical aspects of supporting wellbeing, whether financially or otherwise.”

One financial wellness platform that uses AI to personalize content is BrightPlan, headquartered in San Jose, California. It offers a “financial coach” who can analyze the financial data and factors such as age or life goals of employees and set achievable milestones for savings and automated investments, as well as issuing and paying off debts. An overall “wellness score” shows employees progress toward these goals, said Larry Robinson, BrightPlan chief product officer.

Emergency savings plans gain in currency

The pandemic often forced financially troubled employees to look for high-interest loans or to get into old-age provision in order to make ends meet. Emergency savings funds would have helped reduce this debt.

Smrecek said he saw an increasing interest among hiring managers in offering emergency savings funds as a benefit to employees. “One of the key lessons learned from the pandemic was the value of the emergency savings,” he said. “We see more and more employers focusing on from a number of perspectives, from simply encouraging savings for rainy days, to creating a way for employees to do it right from paychecks, to solutions that are built into broader benefit packages . “

Value of the human option

While a digital platform can meet many of the employees’ financial wellness needs, providing an option for human assistance remains essential, according to experts, whether it be a live chat option on a website, a Zoom call, or a face-to-face meeting with a consultant.

A third of the respondents in the PwC survey rated access to impartial human coaches as the employer benefit they would most like to add to their company’s wellness offerings.

“There can be a real benefit in combining digital platforms with some form of one-on-one coaching to achieve permanent behavioral change,” said Christine Randazzo, co-head of PwC’s Rewards and Perks practice.

BrightPlan is among the platforms that use such a hybrid approach, offering a combination of digital tools and human advisors to leverage the strengths of each support option.

“Many employees prefer the do-it-yourself capabilities of technology, but when they have a more complex financial question they can easily turn to a human advisor,” said Robinson.

Randazzo believes that using human advisors can also help solve one of the biggest challenges companies face when it comes to financial wellness initiatives: convincing employees to use these resources over the long term.

“When employees develop relationships with someone who can motivate and hold them accountable, it can help maintain the practices over time,” said Randazzo.

Dave Zielinski is a freelance business writer and editor based in Minneapolis.

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