With Employees Receptive to Financial Wellness, Strike While the Iron Is Hot

Has financial health reached its moment?

After more than a year of bans and financial uncertainty, employees may be more receptive to participation in financial wellness programs than in the past.

In a survey by Lincoln Financial Group of responses from 437 full-time adults, 79 percent said COVID-19 has changed the way they think about planning their financial future, and 90 percent said they would like to take steps to improve their finances during the next three months. Almost two-thirds said it is important for employers to offer financial wellness programs.

Employees seem ready, and employers can make the most of the moment to help employees better manage their financial lives.

Good timing

The state of Nebraska developed a series of six financial wellness webinars for all state and local public employees and made them available in April when many people were taking stock of their lives and finances as the pandemic receded and vaccination rates increased. Interest in and participation in the financial wellness series exceeded expectations.

Jennifer Davidson, Assistant Professor of Economics at the University of Nebraska-Lincoln and President of the Nebraska Council on Economic Education, created the series. She hoped 500 people would join the program – and offered the first 200 participants financial incentives as well as a lottery with five additional cash prizes if more than 200 participants signed up.

To Davidson’s surprise, more than 2,000 people signed up and an average of 1,000 attended each of the first three webinars.

“We focused on providing basic tools and covering the most important issues,” said Davidson. “There is a lack of financial literacy at all ages, so this should be a lifelong pursuit that people can use to improve as they move through different stages of life.”

The six webinars that will be available to everyone in midsummer, regardless of where they live or work, cover:

  • Budgeting and deleveraging.
  • Investments and retirement planning.
  • Identity Theft and Fraud Awareness.
  • Planning for kids and college.
  • Insurance.
  • Estate planning.

Find the right angle

“Sometimes the most effective solutions are the simplest,” said Susan Shoemaker, a retirement advisor who works in the Southfield, Michigan office of investment advisory firm Captrust. “It takes time, but encouraging a participant to save enough to cover at least three months’ worth of expenses is the most practical approach to averting an emergency.”

Employers can use the financial realities of the pandemic to grab employee attention, noted Nancy DeRusso, executive director and head of financial wellness at Goldman Sachs Ayco Personal Financial Management in New York City. Economic incentive efforts, for example, can be a good hook to hang up financial wellness communications.

In addition to direct incentive payments to eligible individuals, the American Rescue Plan Act provides a child tax credit of up to $ 3,600 for children under 6 years of age and up to $ 3,000 for children 6 to 17 years of age.

Financial wellness programs can help employees save or invest those funds, DeRusso said. “With strong communication, employers can use this information to spark people’s interest in financial wellbeing,” as they consider how best to use that money, she said.

Financial wellness programs can also help employees decide whether to use these funds to set up an emergency savings account, pay off debts, save for retirement, or address other pressing financial problems.

[Related SHRM article:

What’s Happened to Retirement Expectations During the Pandemic?]

Offer including outreach

The report on the TIAA Institute-GFLEC Personal Finance Index 2021, released on April 5, highlights the financial difficulties caused by the COVID-19 pandemic, particularly among minorities who have been disproportionately affected. The survey, conducted in January of more than 3,000 U.S. adults, found that 32 percent of black and Hispanic Americans have a hard time making ends meet in a typical month, compared to 18 percent of white Americans.

“Our data shows a direct link between financial literacy and financial well-being and shows how knowledge can better equip Americans to face adverse economic conditions,” said Annamaria Lusardi, professor of economics and accounting at the George Washington University School of Business and founder from the school’s Global Financial Literacy Excellence Center (GFLEC).

“Just as we need to address institutional barriers, as part of the path to post-pandemic economic recovery, we also need to break down barriers to financial well-being, and that includes better access to financial education,” she advised.

DeRusso encouraged employers to develop financial education programs tailored to the needs of specific demographic segments, including women; LGBTQ, racial and ethnic minority workers; and individuals with a certain income level or resident in certain geographic areas to make financial wellbeing more relevant to employees’ lives.

“Financial well-being is linked to everything else in life,” DeRusso said. “It’s about getting safer.”

Targeted communication and advice “can focus on the challenges and experiences these individuals are going through,” added DeRusso. “Financial wellbeing is not just about access to education,” she noted. “Employers must ensure that [their programs] Offer individual education. “

Use champions

Peer evangelism can also involve staff in the financial wellness program. “Recruit on-site or virtual financial wellness program champions who can help inspire other employees to participate,” suggested Sharon Scanlon, senior vice president of customer experience and producer solutions at Lincoln Financial Group in North Reading , Massachusetts, who are mission-oriented, motivated and passionate about the goals of the program can engage their peers and help increase program participation. “

Financial wellbeing is particularly popular with employees during times of change or transition, Scanlon said. As many employees prepare to return to work on a full-time basis or with a hybrid on-site / home arrangement, you place an emphasis on financial wellness programs and resources.

She said employees may be more receptive to getting their financial houses in order as they prepare for the new normal and all of the uncertainty that comes with it.

Joanne Sammer is a New Jersey-based business and finance writer.

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