Financial wellness programs can boost employee productivity and health

Employers looking for additional benefits to offer employees might want to consider implementing a financial wellness program. Financial wellness programs are still a rarity in U.S. corporations, but they can boost not just employee finances, but also employee productivity and health, according to speakers in a recent Four Seasons Financial Education webinar.

What’s a financial wellness program? A financial wellness program, is not, said the speakers, the same as a financial literacy program, such as a lunch and learn program, which the speakers said are likely to be informative but are not necessarily likely to change financial behavior. They are also not 401(k) meetings, which many employers already have, and where the focus is on plan investments. They are not employee assistance program (EAP) referrals, which can be helpful, but are usually reactive, instead of proactive, the speakers suggested. Workplace financial wellness programs are, instead, ongoing motivation and accountability programs.

Reasons for having one. A well-rounded financial wellness program can contribute not only to the financial security of employees, but also to their physical and mental health, the speakers said. They advised that studies have shown that stress attributable to financial matters exacerbates physical symptoms, and that it can double the risk of heart attack. In addition, the appetite for possessions among American workers has increased over recent years, including even the size of their houses, (by 67%), making it easier than ever for employees to overextend themselves, no matter what financial layer they’re in, and, in turn, adding to stress. The speakers pointed to a recent SHRM study, which found that money is the number one cause of stress among workers.

What to look for in a financial wellness program. The speakers pointed to three barriers to lowering stress that’s attributable to finances: (1) Cost. There are fewer financial professionals available, so the cost of their services is going up; (2) Prioritizing. Employees often fail to make financial planning a priority; and (3) Accountability. A lot of people fall off the financial bandwagon, and consistency equals effectiveness.

A good financial wellness program can address these barriers and help employees get value from assorted existing employer-provided benefits, the speakers said. First, a workplace financial wellness program is more cost-effective than seeing your own personal financial professional, since a workplace program will provide economies of scale.

Second, the speakers also advised that having a financial wellness program creates a sense of importance, so employees are likely to make it a priority. Third, they added that, if the financial wellness program provides goal-setting, that helps employees with accountability.

How to pay for a financial wellness program. The speakers had several pieces of advice with regard to how to pay for a workplace financial wellness program. Sometimes health insurance companies will reimburse companies for them. Employers were also advised to lean on their available benefits firms. Finally, they added that it is possible that 401(k) plan assets could pay for a financial wellness program, but employers should check with the Labor Department first.

Plan communication. Financial wellness vendors have a number of different approaches to communicating with employees. Some are web-based, which can have the advantage of being moderated 24 hours a day, seven days a week, so employees can use them when they’re not working, maximizing employers’ return on investment. Some offer printed publications, but that same information might just be available online for free, at websites such as Others have hotlines, in the form of EAPs, but those tend to be more reactive than proactive, and a proactive approach is what employers should be aiming for. There are also workplace financial wellness programs that use professionals for one-on-one services, but those are pricey, especially if the professionals are board-certified. Employers were told to be wary of entities that offer such programs for free, because they are often focused on pitching their own products instead of doing what’s best for employees.

Further recommendations. When implementing a workplace financial wellness program, it is important for company leaders to be involved, the speakers stated. They should, for example, join employees in signing up for the plan. Companies should also perform regular financial health assessments, coordinate their vendors, and provide quarterly education for employees.

Employees want these programs to be confidential and easy, the speakers said, and teleplanning, which is like telehealth is one way to do that. Employers were advised that, in order to facilitate teleplanning and keep it from cutting into work hours, they could use an empty office with inexpensive computer and camera equipment, and employees could go in during breaks to take care of private financial information.

Finally, employers were advised that workplace financial wellness programs can positively affect their turnover rate. It is important to advertise to potential employees that these programs are available, even if it is through inexpensive means, such as press releases.

SOURCE: Four Seasons Financial Education webinar, “The Missing Ingredient of Wellness Programs,” July 26th

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