Effective Financial Wellness Programs Hinge on One-on-One Advice

With only 19% of workers who are offered a financial wellness program using it, employers need to take a new approach, according to MetLife

Despite all of the talk in the retirement plan industry about financial wellness, only 20% of employers offer such programs, according to a new report from MetLife, “Financial Wellness Programs Foster a Thriving Workforce.”

This is primarily due to the fact that most employers are not aware of the lost productivity that financial stress among employees is costing their company, Meredith Ryan Reid, senior vice president, group benefits at MetLife, tells PLANADVISER.

As MetLife’s report notes, lost productivity costs a company of 10,000 employees 1,922 hours and $28,830 in lost productivity a week. For a single company of this size, that would be a loss of nearly $1.5 million, and throughout the U.S., employers report $250 billion in lost productivity each year.

What employers are more attuned to is that 52% of employees are planning to postpone their retirement, Ryan Reid says. “Many employers are aware that they are having a problem helping people prepare for retirement,” she says. “Sixty-six percent are concerned about workers remaining in the workforce for too long, and 42% are worried about higher benefit costs among older workers. This is something many employers are struggling with and do not know how to address.”

Not only are few employers currently offering financial wellness programs that could alleviate the problems of lost productivity and workers failing to retire in a timely fashion—but among those employees who are offered a financial wellness program, only 19% take advantage of it, MetLife’s report reveals.

It is this lack of traction that frustrates employers and prevents them from offering financial wellness programs, Ryan Reid says. To date, that may be because broadly designed financial wellness programs are not doing an effective job of “serving diverse populations in terms of demographics and locations,” she says. “What is really going to meet employees’ needs and create meaningful improvement is personalized information that is easy for them to use.

“Some of the success we have heard about are financial wellness programs that break things down into activities and smaller actionable steps—goals that keep employees engaged,” Ryan Reid continues.

In addition, in many cases, employers are offering a patchwork of financial wellness education from various providers, she says. “They may be on different platforms, with different touch points,” which makes it difficult for employees to relate.

“As employers start to think about the financial wellness products available, they should be looking for those that are customer friendly, and digitally delivered with the support of a call center,” Ryan Reid says. “With the financial wellness that we offer, we sit across the table with employees or speak with them on the phone” to learn about their personal situation. “You need to have holistic conversations in one-on-one situations. The human element is really important. When employees have to wade through the information on their own, they can be overwhelmed.”

MetLife’s program if offered on a digital platform that permits employees to aggregate their accounts and use calculators to plan for both short-term and long-term goals, she adds.

If an employer is unable to offer personalized one-on-one advice, MetLife’s report says that they can at least, on a company-wide basis, “gather demographic data—generation, life stage, family structure and financial circumstances—and analyze existing benefit data—such as retirement plan contributions and loans and disability claims—to assess the financial health and coverage of employees. This quantifiable data can help employers define their financial wellness objectives and tailor benefits accordingly to best help their employees.”

Once retirement plan advisers and sponsors begin to embrace this type of personalized approach to financial wellness programs, and sponsors witness the positive results, Ryan Reid foresees financial wellness programs gaining more traction. “We have a very long way to go on the adoption curve,” she says. “We are only in the early stages.”