How Do You Optimize Employee Financial Wellness Programs?

Such programs can’t just be a one-shot/once-a-year option. They must offer ongoing support to employees.

Middle age hit before I started to concern myself with long-term financial planning. I bet many of your employees are like me. When you’re just starting out, and your parents may still be helping you, it’s easy to let financial planning slide as something that only “real adults” (i.e., people at least in their forties) should be concerned about.

As most of us know, however, that is faulty logic. The best financial planning begins at the outset of a person’s career. Seminars on 401k options are common, but what’s less common are programs designed to educate employees about the many options they have, beyond 401ks, to build their wealth over time.

For that reason, we’re hearing more about “financial wellness” programs in which an employer brings in resources to educate employees about how to protect and grow the money they just started acquiring. With college so outrageously expensive today, these programs also do the important work of teaching employees how to manage lingering student debt.

A recent article in Forbes by Brian Menickella, reviews why financial wellness programs are not more popular and effective, and what companies could do instead. He notes the typical low participation rate, which doesn’t surprise me. Despite knowing little to nothing about financial planning, I never attend such programs when they’re offered, even if it’s just about the different 40kK options I might have.

Financial stress can result in distracted and burdened employees who are less able to focus on their work than employees who do not have these concerns. Financial difficulties could even result in a professional, “white-collar” employee needing to take on freelance or contract work to supplement their full-time income.

How Do You Get Employees to Participate?

It may make sense to offer an incentive for participation, such as a gift card or an extra day or two of vacation time. An employee who can better manage their personal finances is an employee who likely will be happier and better able to give the company’s work their full effort.

A secondary advantage of making it more likely that employees participate in financial wellness programs is that if these programs truly benefit them, they may remember this great thing their employer did for them and stick around longer.

Do It Yourself or Outsource?

Another key decision for companies to make, according to Menickella’s article, is whether they use an in-house expert or outsource the financial wellness education programs.

“By shifting this burden to specialized benefits partners, employers can provide high-quality financial wellness support without overwhelming their own resources,” Menickella writes.

For me, there also would be the benefit of credibility. Who are you going to believe more when it comes to financial planning advice: a colleague you know does not do financial planning as their full-time job or a person with Certified Financial Planner (CFP) credentials, who does nothing BUT financial planning all day, five days a week?

The Necessity of Ongoing Support

“Successful financial wellness programs engage employees with consistent, digestible, and relatable guidance, helping them make small, impactful financial decisions. This hands-on support builds confidence and ensures that employees feel reassured and empowered in their financial journey, ultimately leading to long-term positive outcomes for both employees and employers,” Menickella reports.

That requires quick and easy access to the financial planning resources that are part of the program. An outsourced partner that offers an on-demand resource, such as an app, or an online chat feature that allows an employee type in a question and get a quick response, would be a huge plus. The ability to get fast guidance is necessary if the program is going to help employees wade through the many small, but impactful, financial planning decisions they must make.

The big takeaway point for me is that to be effective, these programs can’t just be a one-shot/once-a-year deal. They must offer ongoing support. The employee must know they have a partner, arranged by their company, who is there for them when a tough or confusing financial decision needs to be made.

The ability to make better personal financial decisions will lead to employees whose minds are freed up to make better business decisions for your organization.

Do you offer financial wellness programs in your company? If so, what have you learned about what works and what doesn’t in maximizing the benefits of these programs?