Financial wellness programs are needed — here are 3 ways to get started
Daniel Bryant is President of Retirement and Private Wealth at Sheridan Road Financial, a division of HUB International. Heather Garbers is Vice President of Voluntary Benefits and Technology at HUB International.
We were nowhere near finished with the pandemic when business advisors of all stripes encouraged employers to work on how to adapt to a post-lockdown world.
Over a year later, with U.S. Covid-19 vaccination rates nearing 50% and a return to a new normal underway, it’s time to get serious. Ideally, HR managers are willing to address the adequacy of benefits designed for a “normal” environment when everything has changed since then.
In fact, some things haven’t changed. For one thing, Americans were financially stressed before the pandemic and are likely to be even more now. It makes financial wellness strategies more relevant than ever – and an important imperative for employers of all sizes.
According to a recent study of their finances provoked feelings of stress under half of the 19,000 respondents; Just the thought of it made 60% anxious. Our student loan debt of $ 1.7 trillion illustrated one of the burdens. Health care costs are also difficult to usewhich resulted in 53% skipping or delaying care to avoid the cost. All of this poses a challenge to saving and threatens retirement: about 70% of workers say increasing employer contributions to their retirement plans would be helpful, but even better would be retirement planning guidelines.
Employers are and should be in an ideal position to offer solutions because they pay the price. Think absenteeism and presentationalism when employees are stressed about their money at work, with costs that a study is 47 hours per worker per year. And when employees can’t afford to retire, those costs add up too – starting with health care and employee compensation. Every year the average retirement age of an organization is increasing means personnel costs from 1% to 1.5%.
Think about the ROI – but include the intangible
Financial wellness programs are as relevant to small businesses as they are to large ones, and they generate a return on investment as high as 3: 1 – and that only on a reduction in employee-related costs in terms of productivity and absenteeism.
And that’s great, but there are a lot more intangibles to add to it. For starters, they’re great recruiting and retention tools. This is a huge benefit as the post-pandemic talent market is warming to pre-pandemic levels; some expect the unemployment rate shrink to 4.1% by the end of the year. In addition, financial wellness programs help address a major source of stress and can improve employee emotional health as they have been battered by the recession. There are also trickle-down effects on their physical health and the positive effects on workplace culture.
Getting started requires developing a strategy that reflects the mindset of those who have an interest in the outcomes: leading the organization to defend the needs and benefits; and a task force consisting of HR specialists / staff and the team that manages the pension. For best results, remove the silos. How to start.
1. Employee analyzes will localize the needs. Taking a deeper look at how employees are taking advantage of the current benefits is one way to understand their problems. What patterns are there for sick days and vacation days, and how have the employee support plans been used? What are the contribution rate patterns like to pension plans, and has there been an increase (and by which groups) in pension fund borrowing during the pandemic?
2. Discover existing and new solutions. It is surprising how many tools and solutions are hidden in the current range of services. For example, employee support programs are unfortunately underutilized and may well include financial advisory services. These were named by us as a top requirement by 79% of an employee survey, especially for old-age provision. Other overlooked services may have legal benefits. Perform an audit to identify, repackage, and promote them as part of the financial wellness plan. There are many solutions that cost little or nothing to employers, such as pay advances and / or early wage access, as an alternative to costly payday loans.
3. Promote the initiative and its characteristics. Notifications can affect or interrupt any employee performance program. Messaging tailored to specific employee segments will become the most important. Think of clear, uncomplicated communication that is consistently disseminated through channels that ensure maximum attention and acceptance. Think of webinars and face-to-face sessions for some employees, but a text campaign for others. And don’t forget to include an engagement strategy with low-cost enrollment incentives to increase awareness and enrollment.
The last year has been tough for everyone. Resetting effectively is a common challenge. Organizations that make financial wellness programs a part of that need will help their employees get it right.