Helping employees engage in financial wellness at the workplace -- why, how, and when

The need for financial wellness programs is more apparent than ever. According to PwC, today’s employees are unprepared for an extended economic downturn or recession, with more than one-third of full-time employed millennials, Gen Xers, and baby boomers having less than $1,000 saved to deal with unexpected expenses.

While the relationship between financial, mental, and physical health, absenteeism, productivity, and employee happiness makes the case for financial wellness benefits, identifying the right solutions for your workforce and finding a way to engage employees with the offerings are two of the most challenging aspects of creating an effective program of this nature. By understanding and addressing employee needs and introducing a tailored financial wellness program, companies can gain an immense competitive advantage over those who do not.

Taking inventory of your employees

The first step in determining what will be an effective financial wellness solution is to look at your workforce. Based on the demographics of your employees, it is fairly simple to determine what areas of financial education would be of the most interest to your workforce.

If you have an aging workforce, there is more interest in retirement income, rebuilding credit and savings, and life insurance, while a younger workforce might be more interested in paying off student loans, receiving practical help with a first home purchase, and building credit from scratch. Ideally, an effective financial wellness program would incorporate all of these to accommodate as many employees as possible.

Addressing education

Financial education is a key component of any financial wellness program, but how do you get the people who need it most to attend and engage in the program offerings? If you examine the demographics of your workforce, you can identify their most likely preferences to choose an appropriate program.

For example, you may find that the younger generation in your workforce favors apps and online information, while older employees prefer attending in-person financial coaching and classes where they can ask questions as the presentations occur. Taking these preferences into account is vital for active engagement.

While education is a primary ingredient in decreasing the financial literacy gap in the workforce today, it is not enough to completely solve the problem of financial instability. We all know what we are supposed to do, but we often don’t do it – we are human, after all. Continued offerings of a broad range of financial education programs combined with real tools that can be actively used are the best combination. Encouraging employees to participate, and to start again if they fall off the wagon, are key components to an effective financial wellness solution.

When considering a financial wellness program, employers who focus on finding additive financial products and services that cater directly to the current needs of their employees will also achieve better participation in the education programs.

In a survey of 1,000 full-time employees of mid-sized and large U.S. firms, the Financial Health Network found that less than one-third have access to benefits that can help them with financial needs beyond retirement such as student loan evaluation and refinancing tools, low-cost personal loans repaid via payroll, and free access to tools to help with investments.

Yet when organizations offer these types of benefits, they are popular with employees.

This goes to show that people are looking to their employers for solutions. When you provide them with resources most beneficial to them will they then reward you with praise and loyalty, leading to reduced turnover, absenteeism and increased productivity and engagement.

It’s also important to listen to your workforce and evaluate where they need the most help as there is no one-size-fits-all solution for financial health. For example, salary advance programs are common voluntary benefit offerings for employees. While better than a payday loan, they’re simply a band-aid to help employees who live paycheck-to-paycheck continue to do so without building credit or helping them on a long-term basis.

Programs that provide personal installment loans with larger amounts repaid over longer periods of time are significantly more helpful in building financial stability and improving credit.

Assessing your options

A primary driver for implementing financial wellness programs for employers is time and cost. Many benefit providers will offer financial education segments at no cost (to both the employer and the employee) as part of a broader approach to helping employees achieve financial stability. A comprehensive financial wellness program can also come at no cost, take minimal time to implement, and include both education and opportunities to take action such as building credit, reducing debt or increasing savings.

There is no need to wait for open enrollment to offer a financial wellness program. Employees need help now, more than ever since COVID, and unlike other benefits, financial wellness helps them today as well as in the future. Traditional benefit offerings like accidental or life insurance provide protection in the future if/when something goes wrong, but financial education and credit building programs help employees today with the day-to-day issues of budgeting, paying bills on time, and building credit.

Helping employees save money now builds financial stability both in the immediate and long-term, which as a result, builds stronger communities and a sense of pride in the workforce. What more could you ask for?

Marion Mathes is the founder and Chief Executive Officer of CreditWorks, a consumer financial benefit company based in Miami, FL. Mathes oversees all aspects of the business, including driving the company’s overall development strategy and sales and marketing functions. With over 25 years of leadership experience in the consumer and mortgage credit marketplace, Mathes has a proven track record of achieving significant success growing and scaling large financial companies. An expert in securitization and capital markets transactions, Mathes has been a lender, borrower, issuer, bond issuer, and investor. She is a graduate of Princeton University.