The Retirement Advisor Council has issued a viewpoint guide to help employers choose the right financial wellness program for their situation in an effort to reduce financial concerns among workers.
As the economic downturn caused by COVID-19 shifts to a longer-term economic recession, financial worries among employees continue to grow. Roughly 67% of U.S. workers say they are personally stressed about their finances, with one-third of those admitting their personal finance matters are a distraction at work, according to a PwC Employee Financial Wellness Survey.
Prioritizing financial wellness programs increases retention and recruitment, especially now. Many industry experts believe that following the pandemic, financial wellness will become a main priority among employers. The PwC report finds that 78% of financially stressed employees say they would be attracted to companies that care for their financial well-being.
The viewpoint guide lists effective financial wellness programs as those that help employees improve financial security; address financial concerns including college debt, credit card debt, access to cash in emergency situation and retirement savings; integrate employer-provided benefits, including retirement and health care benefits; and more.
One strategy to drive engagement from participants is to design these programs to be entertaining, the guide suggests. To gauge effectiveness, the guide breaks down key metrics into three categories: objective measures, engagement metrics and success stories.
Objective measures focus on concrete concerns such as credit scores, debt level or retirement readiness, while subjective measures emphasize emotions or opinions, such as employee attitudes. Engagement metrics specify a participant’s familiarity with the program, whether it’s first time use, repeat use or adherence over time. Success stories share statistical evidence to document the use, user adherence and effectiveness of programs, according to the guide.
To be successful at improving financial wellness, the guide recommends ensuring the program is accessible and usable to anyone regardless of literacy, wealth or earnings; delivered to employees as early as possible and using a combination of media (online, print, in-person, video conferencing, podcasts, audio content and toll-free contact centers); supported live at least 12 hours a day and six days a week; available from a trusted source; and mindful of privacy requirements, cybersecurity and data protection needs.
With no end to the pandemic in sight, experts are recommending useful strategies to ease financial worries. According to Shane Bartling, senior director, retirement, at Willis Towers Watson, more than half of employers responded to a survey stating they are creating financial well-being teams to promote existing benefits.
“Employers are very eager to address their workers’ widespread anxiety around what is happening and to find ways to demonstrate the employer’s support for the well-being of their workforce in this difficult time,” Bartling said in an interview with PLANSPONSOR. “They are not only looking to expand usage of their available benefits but also looking to enhance their benefits. One-third of the respondents are looking to implement new financial counseling resources.”
A study by Travis Credit Union found most workers are currently prioritizing short-term needs related to financial wellness, such as budgeting and saving, credit card debt and unexpected medical expenses. More employees are prioritizing paying down their credit card debt rather than student loans.
Longer-term needs, including retirement planning, have been on the back burner while employers face immediate concerns, including education on emergency savings accounts. Yet the Retirement Advisor Council guide shows workers are not prepared for what lies ahead in retirement either. The guide reports that 32% of employees are not saving for retirement due to other expenses and debt, and 49% of those saving for retirement say they will likely need to access their retirement savings for expenses prior to retiring. Additionally, 42% of those who are financially stressed expect to work in retirement for financial reasons.
More information on the Retirement Advisor Council viewpoints guide can be found here.