Best Practices for a Workplace Financial Wellness Program

As an HR professional weighing the options of a comprehensive financial wellness program for your organization, it is best to review the components of a successful one.

Financial Wellness should be. . .

Easily accessible to maximize engagement by leveraging innovative technology, and integrating professional experts and advice.

Integrated with programs that employees already uses regularly to manage their healthcare, savings and other benefits.

Incorporate a customized and personalized assessment to acknowledge each individual employee’s financial concerns based on their current financial situation, income, short and long term savings, debt-load and insurance coverage needs.

Self-directed so that an employee may engage with the program whenever and wherever they are 24/7 365 days a year, at home or on the job.  Employer-provided financial wellness programs that offer self-directed approaches to financial learning have been shown to improve employees’ financial management behaviors, and increase financial and career satisfaction.

Responsive to an employee’s changing financial situation, including planned and unplanned financial events. A comprehensive financial wellness program will impact the ability of the program to affect an employee’s financial wellbeing holistically, while also contributing to long-term use of the program.

Take a lifestyle and behavioral approach to financial wealth and health that incorporates strategies that encourage regular participation with simple steps to help employees build their financial wellness over time.

Dynamic by offering financial tools, relevant and timely communication, and two-way channels for employees to be able to access personalized information and expert advice.

Focused on risk assessment, anticipating and preventing financial emergencies, rather than responding exclusively to those that already exist. The program should offer tailored financial advice in order to increase participants’ financial security and financial resiliency when faced with a crisis. In doing so, employees are better equipped in the case that a financial emergency

does arise, and may be able to do so with little impact on their job performance and/or absenteeism.

Eliminate barriers and provide the information and access that employees need in order to increase their financial capability.

Visit http://www.getmelius.com to learn more about the most efficient way to financial wellness for your employees.

The Business Benefits of an Employee Financial Wellness Program

Employees that bring their money worries to work tend to be less engaged and productive on the job, which eventually leads to more headaches and concerns for Human Resources.

The Society for Human Resource Management 2014 Survey of Financial Wellness and Education found that employees with personal finance issues have higher emotional and physical stress which may also lead to an increase in absenteeism and lower productivity. Personal finance problems in an employee’s life can lead to performance and health problems on the job.

This survey and other financial wellness studies provide proof that when employees learn and build the simple skills and behavioral changing habits they need to improve their personal finances, they also improve at work.

Impressive results show that a proactive financial wellness strategy in the workplace:

• Reduces absenteeism and sick time usage
• Increases retention and employee loyalty
• Minimizes 401(k) loan usage
• Reduces financial related stress and health issues among employees
• Improves workplace performance

85 percent of employers say employees participating in financial wellness programs showed more productivity at work. According to a March 2015 bankrate.com article, a financial wellness program can also combat low participation rates in 401(k) plans. 1

Without the resources to address financial emergencies and manage high debt loads, financially distressed workers may reduce or discontinue 401(k) contributions, or take 401(k) loans, depleting retirement savings and disturbing the balance of an employer’s 401(k) portfolio.2

Experts estimate that employees who delay retirement cost their employer $10,000-$50,000 per year for every year that they delay retirement beyond normal retirement age. This is due to higher health care costs and salaries for these employees vs. younger colleagues who would take their place. This estimate does not include intangible costs related to performance, productivity, and employee engagement. 3

A financial wellness program does not have to be complicated for HR or employees. Melius is a more proactive and holistic approach to improving financial well-being that encourages daily changes in spending and saving behavior while helping workers break the feast or famine cycle of living paycheck-to-paycheck.

Melius helps employees live more responsibly today, while planning wisely for tomorrow. Visit www.getmelius.com for more.

Footnotes

1 http://www.crainsdetroit.com/article/20150524/BLOG200/305249991/a-healthy-workplace-includes-employee-financial-wellness

2 https://www.emergebenefit.com/assets/librarypdfs/Workplace-Financial-Wellness-White-Paper.pdf

3. http://www.financialfinesse.com/wp-content/uploads/2014/07/ROI-Case-Study-08012013.pdf

How HR Can Contribute to Employee Engagement

According to Benefits Pro magazine and a survey by Jellyvision (Harris Poll), employees want financial well-being. In other words, they don’t want to stress about money. According to this survey 86% of employees think employers should offer a program to help boost their financial confidence.1

10 Ways Financial Wellness Helps Your Employees

1) Financial wellness programs help reduce mental and physical stress so employees can focus on their work responsibilities and become more productive and engaged with their colleagues and their goals.

2) Financial well-being has a direct impact on employees health including a reduction in migraines/headaches, insomnia, high blood pressure, heart attacks, stomach ulcers, muscle tension, severe anxiety and depression.2

3) When combined with other corporate wellness benefits, financial wellness fosters workplace communication, harmony, happiness and a more holistic and healthy lifestyle.

4) Financial wellness helps employees understand the key financial risks they face everyday and give them the best tools to manage those risks. This includes loss of income due to illness, injury or premature death.

5) Helps employees build individual self confidence and flourish with a sense of financial well-being that has a direct impact on their individual performance at work, family and future.

6) Become more mindful of important tasks like reviewing insurance coverage, beneficiary designations and understanding tax implications of investments.

7) Financial education helps employees increase contributions to retirement accounts like a 401K plan, while paying off credit card balances and saving for unexpected emergencies.

8) Reduces stress related illnesses and as a result out-of-pocket health care costs.

9) Gives employees guidance and a plan to put them on track to meet future financial goals, like saving for a wedding or college while helping them with daily financial behaviors in order to make informed decisions and create strong financial plans.

10) Creates better financial habits for life and has employees embracing the fact that financial well-being is a series of daily spending and saving rituals that when practiced can lead to a more secure future.

1http://www.benefitspro.com/2015/10/12/employees-want-financial-wellness-programs-private

2 http://www.financialfinesse.com/wp-content/uploads/2014/07/ROI-Case-Study-08012013.pdf

How to Bring Financial Wellness Benefits to Your Workplace

With financial wellness leading as one of the most popular trends for workplace benefits in 2016, a majority of organizations feel a sense of responsibility to offer a wellness program to help their staff become more financially secure.  Employees are stressed and don’t have the mental bandwidth it takes to manage their finances properly let alone have enough savings for short term emergencies and long term goals. Supporting the financial health of employees is now becoming as popular as programs for their physical and nutritional health.

However, when faced with workers’ varying income levels and financial literacy, in addition to issues around discussing personal financial matters, HR may not see a clear way to driving employees’ financial wellness.

Critical best practices include implementing benefits that engage employees with unbiased information while leveraging technology and offering 24/7 cloud-based access with a customized personal finance program that takes into account employees desire for privacy. 

As financial wellness becomes more popular, HR will find there are many vendors, solutions, and nonprofit institutions available to support employers with their financial health.  Trends in new financial wellness programs include –

• Those that focus on long-term retirement benefits using both technology and professionals.
• Professional advisors that offer group or individual education for free and are available for hire at a cost to the employee.
• Technology-directed only programs with a web-based platform with online tools and content for employees.
• Financial literacy, with 100% focus on education, but not necessarily wellness or actionable steps to take.
• A program that offers call as-needed for financial guidance which may or may not be included with an employee assistance program.
• Lenders and banks that might offer education in addition to workplace or institutional lending and banking “products.”
• 401(k) advisors who bundle an outside vendor into their services or offer educational programs on topics besides retirement.
• And non-profit, which may range from professionals donating time to grant-sponsored education with some non-profits allowing professionals easier entry into corporations to sell proprietary products.

When reviewing financial wellness programs organizations should seek partners that embrace a comprehensive and holistic personal finance plan for each employee with a customized assessment that also includes financial counseling/planning and employee assistance. The chosen program should also help sidestep inertia while simplifying the often complex process of savings, investing and risk protection.

While financial wellness programs have typically been comprised of financial planning diagnostics, and an overload of information and too often employer-subsidized time with a financial planner, the use of technology has given way to new startups like Melius, and other digital cloud-based software programs. 

These new financial wellness programs offer the ability to deliver a more effective and proactive communication tool with timely and relevant insights on how to help employees reach their financial goals in a more immediate way. These software platforms that help advisors, agents and brokers communicate with employees also help HR save time and money and are easy to implement.  Simply put, they offer guidance that helps employees identify their financial needs while providing simple steps to making smarter choices with their money.

Programs like these also help employees gain confidence by developing smarter financial habits like taking advantage of corporate retirement benefits including contributions to their 401K.

Whether your interested in creating a wellness program for your employees or strengthening your spending, saving and insuring habits, visit http://www.getmelius.com for a demonstration.

Growing Demand for Financial Literacy

As corporate wellness programs continue to become more popular with American businesses, so do financially-focused benefit solutions. Today, 70 percent of employers have wellness programs in place*. Among the largest US employers, 93 percent intend to focus on the financial well-being of their employees^. According to the 2015 Financial Wellness Survey from FSFE, 60 percent of employers that offer wellness programs already have a financial component.

Employers are seeing the benefits of offering a financial wellness program and it has been proven that having people who are more financially literate will help them reduce their stress and help them become better, healthier employees.

A More Wholistic Approach to Wellness

Employers who already offer wellness as a part of their benefits package are creating more customized and personalized benefit programs. While corporate wellness use to focus on physical health with gym memberships and healthier food options in the company pantry and cafeteria, now organizations are developing much more holistic programs and concentrating on well-being, which now includes emotional and financial.

Employee financial health can contribute to emotional and physical health, so a growing number of employers are now providing resources to help their team manage and protect their money.  While there are many types of companies offering financial wellness programs, from those that focus strictly on financial education to those that have a hotline that connects employees with financial advisors. However a truly effective comprehensive financial wellness program will prompt employees with short and long term financial behavioral changes with the help of technology and experts. 

Voluntary benefits are also booming. Employers and their employees are finding the value in supplemental benefits as these benefits are a way to fill coverage gaps, customize coverage, and provide additional peace of mind in the case of an accident or unexpected illness. Popular lines include hospital indemnity, dental, and short-term disability insurance. A comprehensive financial wellness program can help employees understand how voluntary benefits work and which ones will meet their needs.

US News & World Report’s Money source recently included financial fitness as the number two “Employee Benefit Trends to Watch in 2016”

Easing Economic Stress

As we move into 2016, organizations can anticipate the wellness movement to continue through the expansion of financial wellness, a component of the movement specifically focused on helping individuals ease economic stress, overcome money challenges and promote financial health.

The Business Benefits of Financial Wellness

Research has proven that financial wellness yields similar benefits to those from a traditional medical-based wellness program. With this, organizations will see reduced long-term healthcare costs, higher efficiency, longer tenure and decreased absenteeism among their staff.

*SHRM 2015 Employee Benefits Survey. 

^2015 Aon Hewitt survey of 250 employers.

Why Offer Financial Wellness in the Workplace?

57% of employers agree that offering financial education to employees has a positive effect on productivity.1

Over the past decade or so, employers have seen health and wellness programs benefit their organization with fewer absences and less demands on employer-sponsored health insurance. Now employers are embracing a new type of wellness program – financial wellness.

$70 Billion in 401(k) Loans

24% of employees say that personal financial issues are a distraction at work. 39% say they spend three or more hours each week thinking about or dealing with issues related to their personal finances. 4 A shocking number of workers are even misusing their 401(K) with one in four workers resorting to taking out 401(k) loans each year to the tune of $70 billion, nationally. 2

Proper Guidance Helps Build a Stronger Workforce

Most employees need help with more than just their retirement plans. They are looking for recommendations on how to manage all areas of their personal finance, from debt and cash flow management to the proper insurance coverage.  With the proper guidance that provides daily steps to take to improve their finances, employees feel empowered and become more productive workers.

Financial Distress, A Distraction for HR

Employees who have poor financial habits can’t meet their obligations or plan for the future. They become worried, stressed, sick, anxious and possibly depressed. In turn, employee morale and job productivity are reduced and the result is an increase in absenteeism, tardiness, lack of focus and commitment. Their financial distress affects their performance at work. Meanwhile health insurance costs increase as may substance abuse.  Other health concerns include on the job irritability, fatigue and sleeplessness. These stressed-out employee behaviors then become distractions for HR.

Employees Welcome Financial Wellness

To alleviate these stresses, an increasing number of employers are implementing financial wellness programs that educate employees about the financial risks they face and provide tools to help manage those risks. 3   Financial wellness results from making informed short and long term financial decisions that result in optimal health, productivity and a solid foundation for every state in life. Financial wellness can produce a state where employee stress is gone and actions are put in place to support financial goals and workplace performance.

Financial Wellness providers like SimpleFi report that employees are lining up for financial advice.5 Unfortunately, not everyone knows how to handle their personal finances on their own, especially given the lack of education in schools and the finance and insurance industries lack of transparency, making understanding finance and risk management a very difficult task to handle. According to Financial Advisor magazine a recent survey has shown that 60% of employees want one-on-one financial planning assistance from their employer.

The CFBP cited research in its report that seven out of 10 Americans claim financial stress is the most common type of stress they experience. According to the report human resource managers are noticing the effects of financial stress. Sixty-one percent of HR professionals blame financial stress for negatively impacting work performance; 22 percent said financial stress has a “large impact” on employee engagement. “Financial wellness programs are not something employers are promoting just because they want to be good corporate citizens,” said the CFPB report. “Large and small employers are beginning to think about financial wellness programs at work because it makes sense to do so.”

Financial Wellness programs come in many different forms and new companies are launching every day.  Melius is a more proactive and holistic approach to improving financial health that encourages daily changes in spending and saving behavior while helping workers break the feast or famine cycle of living paycheck to paycheck.

RSVP for a demonstration today at www.getmelius.com

Footnotes

1Metlife’s 12th annual US Employee Benefits Trends Study

2 Bank of Nevada Leavitt Group present “Workplace Financial Wellness: The Critical Need for Employee Financial Wellness”

3http://research.prudential.com/documents/rp/financial-wellness-the-next-frontier-in-wellness-programs.pdf

4 PricewaterhouseCoopers, “Employee Financial Wellness Survey,” 2014, page 11.

5 https://www.simplefinow.com/employees-want-it-heres-how-to-get-it-workplace-financial-wellness/

6 http://www.fa-mag.com/news/employer-financial-wellness-programs-create-new-work-for-financial-advisors-21138.html

7 http://www.benefitspro.com/2014/09/29/save-3-on-every-1-spent-on-financial-wellness?t=cost-containment

Additional research from –

http://files.consumerfinance.gov/f/201408_cfpb_report_financial-wellness-at-work.pdf

View at Medium.com

Financial Wellness in the Workplace

Statistics vary, but  most seem pretty dismal. The majority of American workers are facing economic challenges that threaten their ability to meet their current and future financial needs. Nearly 2 out of 3 American families live paycheck to paycheck.1  For many families, a premature death or disability could mean financial ruin. An unexpected health event could generate unforeseen out of pocket expenses.

Money, Not Work, is the Number One Stressor

The American Psychological Association (APA) recently reported that money remains the number one stressor for 72 % of Americans.

Employees who are stressed and suffer from money anxiety are disengaged from their jobs and are more apt to be sick, absent or spending hours at work dealing with unpaid bills collectors and creditors. The question than must be asked, What can employers do to meaningfully support an employee’s financial and emotional wellness as well as their physical wellbeing? 

Focusing on financial wellness benefits will offer employees a healthy awareness and understanding of their personal circumstances while recommending the steps they need to take to improve the state of their financial situation.

Specifically, financial wellness benefits will help employees plan for their financial future while maximizing their savings and asset protection.

70 % of HR professionals agree that personal financial challenges also impact employee performance.2 For employers a financial wellness benefit program will minimize the employee costs associated with financial stress while helping to lessen financial stress in the workplace, increase retirement readiness, and strengthen workplace culture and productivity.

The Benefits of a Financial Wellness Program

For employers, financial wellness is an employee benefit designed to improve employees’ financial behavior and outcomes while also driving business performance.

For employees financial wellness helps them improve their financial health and builds confidence while helping them spend wisely, save for emergencies, protect their assets properly, understand their workplace benefits and invest wisely for the future.

How it Benefits Your Organization

An effective financial wellness program will help employees

• gain more control over their day-to-day finances
• save enough of a cushion to absorb a financial shock
• direct them to actively work towards their savings goals and
• also help them develop financial security and freedom

Most employers believe that helping their team gain control over their personal finances will also help the company’s bottom line.

Employees who feel financially secure are also more apt to

• be more satisfied and productive at work
• loyal to their team members and their organizations
• engaged with everyday tasks and goals

A Framework for Financial Wellness

Experts agree that a solid foundation for financial wellness programs takes into consideration –

• Understanding employees’ financial stressors and priorities
• Implementation of benefits that matter to employees
• Segmentation of financial solutions to target employees at diverse income and financial knowledge levels
• Offering of financial counseling and planning and employee assistance programs

New Solutions – A Faster Way to Financial Well-Being

One of the biggest challenges in developing a financial wellness program that employees want to engage in includes tapping into an “always on” 24/7 digital world.

New requirements for financial wellness programs include 

• Personalized financial guidance that harnesses the power of technology
• Convenience with a cloud-based platform that is available 24/7, 365 days a year
• Programmed with proven intelligent financial guidance and education
• Simple, easy to understand with recommendations that yields the greatest results in the shortest amount of time
• Capable of connecting employees online to experts for further education and direction

A new breed of financial wellness program creators include organizations who offer “on call” personal finance coaching to employees via phone, online chat or in person.

Another financial wellness offering comes from Boston-based tech start up Melius which has addresses these requirements with an automated personal finance guidance system.

One of the biggest benefits for HR is that it takes little to no time to implement Melius and that means more time to work on core HR responsibilities and overall goals for the business.

Melius eliminates the need for a series of financial workshops, lunch and learns, e-learning videos, or ongoing employee wellness education. The education and guidance is built right into the software platform and around very direct actionable advice that is personalized for each employee. Melius allows employees the ability to connect with experts when they are ready with a better understanding of what they need.

Learn more about Melius. RSVP for a demonstration today.