How to support employee financial wellbeing and get their attention during times of stress
By helping workers take control of their short- and long-term financial goals, you can help them as well as make progress on your own goals of employee attainment and retention.
Following more than two years of pandemic-related disruptions to our everyday lives, 2022’s economic turmoil and market volatility have added insult to injury. Workers are feeling stressed by generationally high inflation, precipitous market declines, and persistent headlines about a potential recession — and there doesn’t seem to be relief in sight.
It hasn’t been easy for employers, either, with the Great Resignation, the Great Attrition, labor shortages, and quiet quitting. And financial stress among employees can be an expensive burden for business, costing you more than $2,400 per employee in absenteeism and lost productivity.
Financial wellness programs can be good for both the employee and employer
Your retirement plan, as part of your benefits program, has long been a means of helping your current employees and attracting new ones. Offering employees a holistic financial wellness program can help boost the power of your plan in the current labor market and environment of employee financial stress. Adding financial wellness resources can be a practical, cost-effective way to help reduce stress levels and mitigate lost productivity. In fact, 74% of employees say that financial wellness programs help reduce their financial stress.
Investing in your employees’ financial health today by providing them tools and information can have a real impact on their lives in the long run. Access to financial help at work increases the likelihood of employees considering their financial situation to be either ‘excellent’ or ‘good’ by 24%. It can also help increase positive financial behaviors, such as following a household budget, increasing retirement plan contributions, and having a written retirement plan. When financial wellness plans are combined with working with a financial professional, the gains can be even more pronounced.
Don’t just build it and expect them to come
But just providing the tools isn’t enough. You’ll first want to engage your employees to take action in their retirement plan and their overall financial lives. A best practice is to go at it from a few angles to make sure you’re catching their attention: at moments of engagement, at moments of change, and through continuous outreach to fill in the gaps.
We’ve found that we get excellent engagement when we take advantage of critical moments — when people are already in a decision-making mindset, or when they have recently taken another action that heightens their engagement levels.
For example, we’ve found employees are more engaged and likely to take action during open enrollment, as well as during new hire onboarding when they’re excited for their new role and available company benefits. Another time we’ve found participants strongly engaged to take action is immediately after enrolling in their retirement plan:
- The majority of participants elect auto-increase (if available) within the first three months after starting to save in their plan
- 86% of participants who consolidate in assets to their new savings plan do so in the first three months
- The majority of participants who have in-plan advice available and adopted the feature, do so in the first 6 months of saving
But financial wellbeing doesn’t end with enrolling in their plan. We look for other critical moments of engagement — such as logging in to the website and using tools, to encourage action.
We also find people are looking for help when they’re approaching or going through a change. That’s a critical time to engage them in relevant content. For example, once employees turn 50, there’s an opportunity to talk to them about retirement in a new way — because it’s getting much closer — and about new topics, such as retirement income or the factors that can impact their spending in retirement.
And finally, in addition to opportunistic outreach, a regular flow of financial wellness outreach is critical. People need help with financial basics such as creating a budget, saving for college, or developing an estate plan, and as an employer you should partner with a financial professional and provider that can fill that role.
Related: How to combat financial stress during inflation and other economic stressors
Help while the stress is high
Employees are looking for help with their finances. Eighty-nine percent of employees want financial wellness programs, and access to them helps improve retention, with two-thirds saying financial wellness programs make them more likely to stay with their employer. With so much confusion and disruption in the economy affecting their daily lives, employees are understandably stressed. This also represents a critical inflection point — when employees are stressed and looking for help, employers have a chance to provide access to easy-to-understand financial information. By helping workers take control of their short- and long-term financial goals, you can help them as well as make progress on your own goals of employee attainment and retention.
Jack Barry, Head of Product Development, John Hancock Retirement
Disclosures
The content of this document is for general information only and is believed to be accurate and reliable as of the posting date, but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made.