Most financial wellness programs need a checkup (retirement planning isn't enough)

How many doctors’ offices recommend the same course of treatment to every patient, regardless of their vitals and health history? What kind of physical therapy clinic advocates for an unchanging routine of strengthening exercises regardless of the patient’s initial symptoms or progress?

You’d be right to be wary of any practice that claims to promote “wellness” but seems to have a one-size-fits-all approach to achieving it. But that’s exactly what most Americans deal with when it comes to financial wellness programs touted by their employer. Many programs are inadequate at best and inequitable and inaccessible at their worst — and Americans who need help navigating their finances the most often see their own financial wellness suffer as a result.

Employees suffer when financial wellness is misprescribed. First and foremost, it’s affecting their physical wellbeing. Almost 70% of Americans surveyed said personal financial issues are affecting their actual health, and further research shows financial stress can cause everything from heart problems to depression. And financial problems tend to beget more financial problems. When Americans are stressed about their finances, they can lose more than 11 hours of work productivity a week, impairing their ability to earn wages, and it’s estimated that employees can lose up to $2,000 in a year due to a lack of financial literacy.

What passes for financial “wellness” in America is a piecemeal set of dated tools with even more dated practices. When left unchecked, the outcome is grim. But employers can — and should — strive to offer a healthier set of options for employees.

How to remedy poor financial wellness programs

Financial education that touts the benefits of good habits like budgeting, cash-based spending and targeted savings are table stakes. You would expect your doctor to talk about healthy eating and exercise at a bare minimum — but you’re really there for personalized care, not just generic advice.

The same kind of tailoring should be the case for financial wellness programs, but it’s not. Let’s take a look at what’s ailing most financial wellness programs, and what the remedy should be.

1. Most financial wellness programs prescribe finite practices. Existing employee wellness programs often feature retirement planning or tools to better navigate health insurance as a centerpiece. And while important, this kind of long-term financial focus is out of touch with many Americans’ needs. Many modern employees are saddled with student loan debt, for example, which chips away at their ability to afford retirement savings and other long-term planning. Most financial wellness programs don’t take this into consideration. The remedy: Employers need to incorporate education and benefits that provide shorter-term value to employees. Student loan debt repayment, tuition reimbursement and providing mental health resources are just a few examples of support that employers can provide that takes financial stress off the employee and allows them to work more comfortably.
2. Most companies treat financial wellness as a checkbox item. Employers often adopt tech platforms or solutions that claim to offer financial wellness resources, but are really no better than a break room bulletin board. What use is a seminar on how to boost savings when nearly two-thirds of employees are living paycheck-to-paycheck? Moreover, what value does that system really bring? Is it actually helping to retain employees, or helping them better manage personal finances so they’re more engaged at work? The remedy: Financial wellness isn’t just a product bought off the shelf. Teaching real financial literacy and empowering employees to be better at managing their hard-earned wages needs to be a culture baked into the company. Instead of long coursework, consider setting up a financial mentorship program among employees, where questions can be asked in a safe space with answers coming from those who have lived experience. Or, consider presenting content in more engaging ways. Techniques such as mimicking a Reddit “Ask Me Anything” (AMA) Q&A for financial advice, or crowdsourcing the best financial resources from fellow employees into a Wiki page can help show the solution isn’t just on autopilot.
3. Employees who need financial wellness programs the most are underserved. The majority of Americans living paycheck-to-paycheck are arguably in the most critical need of financial education and support, but they’re often left behind. While COVID-19 has been declared to be no longer a global health emergency, its effects loom large over the economy as a whole. The pandemic showed that this high percentage of Americans living on a razor’s-edge with pay is unsustainable, and that few businesses are doing enough to support them. The remedy: Earned wage access programs that allow employees to safely receive payment for work already completed can greatly help. When employees aren’t focused on surviving day-to-day, they can better focus on the task at hand and can be more present at work.

Related: Make it personal: How self-service options can enhance financial wellness programs

Is your financial “wellness” offering really serving employees? Are they actually retaining the information and benefits, or is it just for show? By making financial wellness part of company culture, tailoring wellness programs to employees’ needs and investing in programs that have proven to retain employees longer, like earned wage access, businesses can better guide their employees to real financial health improvement.

Tate Hackert is CEO and founder of ZayZoon.