From afterthought to essential benefit: 6 ways financial wellness has evolved

Physical wellness has long been the cornerstone of employee benefit programs. Now the pandemic has brought to light the importance of including financial wellness initiatives, not only to assist employees but as part of a recruitment and retention strategy.

“Workers are expecting more employer support, and they are willing to change jobs to get it,” according to a report from Financial Finesse.

To compete for talent, employers must shift their approach to financial well-being to accommodate this new workforce. The report found several trends regarding financial wellness and company culture:

1. Increasing awareness of employee concerns. Five years ago, employees ranked low pay and company culture as primary reasons for stress at work, while employers ranked both as low concerns. Today, culture, pay and benefits are among the top reasons workers seek a new job. Companies are responding by paying higher wages, increasing benefit offerings and promoting company culture to attract and retain employees.

2. Adopting financial awareness as a corporate responsibility. Employers feel a sense of obligation to help promote employee financial well-being. Fifty-six percent of employers believe the importance of financial well-being programs has increased in the last two years, and 85 percent have developed or are in the process of developing a financial well-being strategy.

3. Intersecting financial, mental and physical health. The body of evidence supporting the relationship among mental, physical and financial health is overwhelming. Sixty-five percent of employees with debt stress report it has an impact on their physical health, and financial concern is the top reason cited by employees with low mental health. Historically, employers have treated each separately, but there is a rise in financial wellness initiatives that incorporate mental and physical health as part of a larger holistic wellness strategy.

4. Promoting DEI through financial wellness initiatives. Until recently, employee resource groups had to proactively ask HR departments for resources to address members’ financial concerns. Within the last few years, HR professionals have actively promoted the availability of resources as part of larger DEI initiatives.

5. Personalizing the employee experience. Given the diversity and complexity of today’s workforce, a one-size-fits-all approach is ineffective and outdated. A recent survey found that 55 percent of respondents would prefer that their employer use all information available to personalize benefits as much as possible. Employers are using technology to customize the way benefit information and education are delivered.

6. Holding financial wellness providers accountable. Although the U.S. Department of Labor’s fiduciary rule stalled, employer concern for making sure employees receive financial guidance that puts their interests first is alive. This is why employers are asking financial wellness providers to maintain a fiduciary standard when providing financial guidance and advice to employees.

The report outlined five steps on the road to success.

1. Review and refine the benefit strategy. It’s not a matter of how many benefits employers offer but which ones. Survey employees to find out what causes them stress, and offer benefits that address the root causes.

2. Up the communication game. How benefits are communicated is key to employee retention. When employees understand their benefits, they are more likely to be satisfied with their current job; more likely to feel valued and appreciated; and more likely to remain with their current employer.

3. Develop a culture of holistic wellness. When it comes to employee wellness, the whole is greater than the sum of its parts. Look for opportunities to bring emotional, physical and financial wellness benefits into alignment.

4. Measure quality more than quantity. Program success often is measured by participation rates, but that’s not necessarily true when it comes to financial wellness. From a bottom-line perspective, improving the financial health of the most financially vulnerable will have a greater net effect than improving the health of everyone else. Ideally, the best program will have quality and quantity when it comes to engagement

5. Provide an omni-channeled financial wellness program. Research shows that the more channels an employee engages with, the better the outcome.

“The pandemic introduces a host of new financial challenges, sparking a migration of workers in search of better pay and benefits,” the report said. ”Financial well-being benefits, once considered nice to have, are now considered a must-have by today’s jobseeker.”