5 Steps to Create a Financial Wellness Program

In today’s economy, Americans are worried about their finances, and it spills over into every aspect of their lives, even their work. This financial stress not only effects personal wellbeing but it is causing a drain on productivity and engagement.  

Employers are often viewed as a trusted source of financial information. Because of that trust and their captive access to employees, employers have a unique opportunity to provide the education, interventions and programs that can improve the financial well-being of the workforce, as well as get engagement and productivity back on track.

Why Have a Financial Wellness Program for Your Employees?

A recent survey found that 78% of American workers are living paycheck-to-paycheck.[1] It’s no wonder so many workers say they’re stressed about finances.

But what does this mean for you, their employer?

Employees stressed about their finances are far more likely to be late to work, absent, sick or distracted and unable to work effectively. According to the Chicago Business Journal, 43% of employees who are distracted by finances spend three or more working hours a week during work hours thinking about financial matters or dealing with them. This equates to 150 hours per worker per year in lost productivity.[2] That’s a bundle of lost money that employers will never recover.

These numbers are causing employers to take notice, and more and more are establishing financial wellness programs to help.

5 Steps to Create a Financial Wellness Program

Employees generally need help in four areas: budgeting, debt elimination, saving, and retirement planning. A good financial wellness program will address these visible areas while also addressing the invisible problem – poor attitudes about money.

The goal of a financial wellness program is to change employees’ mindset and behavior regarding their finances. A change that can result in educating employees how to handle their finances and thus reduce their stress.

If you’ve decided to offer a financial wellness program to your employees, here are 5 critical steps to get you started and on your way… 

  1. Determine the program’s goals and the main problem you’re trying to solve. Is it to help your Baby Boomer employees confidently retire? Decrease the burden of student loan debt on Millennials and Gen Xers? Is it to increase employee knowledge about financial planning? Reduce absenteeism? Or reduce healthcare costs? You’ll need to take into consideration both your needs and the needs of your employees. It might even be a good idea to conduct an anonymous survey and ask your employees what they would like to see in such a program. Their answers may surprise you. When you do make your decision as to the type of program to implement, be sure to give their interests top priority.

  2. Determine your employee demographics. Are there more Baby Boomers or Millennials? Your employee makeup will determine which financial topics your employees are interested in.
  3. Select a vendor. Most financial wellness programs are conducted by outside vendors who can give unbiased education to your employees about their finances while at the same time keeping their confidences. You will probably bear the cost of the program. Do your due diligence. Select with care the program and vendor you would take with any fiduciary decision.
  4. Have a strong communication plan. Advertise the program well in advance. Tell your employees why you’re sponsoring the program and how it can help them. Be a little cautious, though, since money can be a touchy subject for many people. Keep programs top-of-mind and be there for people when they need support by communicating year-round.
  5. Track results regularly after implementation. Results are important. Has absenteeism decreased? Has 401(k) participation increased? Those are easy metrics to measure. It is more difficult to determine attitudes about money and increased productivity. Those may take a little longer to realize.

Measuring Success

Your ROI? With a good financial wellness program in place, you might:

  • Improve employee engagement and morale
  • Lower health care costs
  • Increase 401(k) participation
  • Attract better employees
  • Retain top employees

It’s a win-win for you and your employees; the program may even pay for itself if you consider the productivity benefits to your company. After all, less stressed employees are happier and happier employees are more productive.

You probably already have different types of wellness plans in your company –smoking cessation, nutrition, fitness. Adding a financial wellness plan to the mix is a natural progression.

Creating an environment where employees feel empowered about their finances is a dialog; we’re happy to help! At our firm, we feel employee education starts with the plan sponsor. We’re here to provide resources that can help your employees confidently work toward their financial goals.

[1] Friedman, Zack. “78% of Workers Live Paycheck to Paycheck.” Forbes Magazine. Jan. 2019.

[2] Lane, Shannon. “Employees’ money worries drain employers’ bottom line.” Chicago Business Journal, April 15, 2019.

Insight By
Mike Iley
Vice President & Managing Director
Retirement Plan Consulting
File Number

3089486.1

Topic
Retirement Plans
Published on

May 19, 2020

updated on

May 19, 2020

Disclosure

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a registered Broker/Dealer and Investment Advisor, member FINRA/SIPC. LoVasco Consulting Group is independently owned and operated.

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