Should employers be responsible for the financial well-being of their employees?


Financial Wellness is something we’ve put in front of our business clients for several years now, and it appears the marketplace is catching on. According to Rob Austin, director of retirement research at Aon Hewitt, Financial Wellness is a key workplace trend for 2018 and beyond. “This year, employers are likely to focus on the financial well-being of workers in a way that extends beyond retirement, such as help with managing student loan debt, day-to-day budgeting, and even physical and emotional well-being," Rob says.

This makes sense. The landscape of what employers have provided their employees in the form of retirement benefits and other perks has experienced a total sea change in the past 50 years. It used to be you'd spend your entire career at the same company and retire with a gold watch and a guaranteed pension. Along the way you'd get free health care, a company car, a country club membership, etc. This (old) system where the employer was responsible for the financial well-being of the employee has totally flipped. Now, virtually all employees are on the hook for their own financial success.

The problem here is that many employees are totally unequipped and unprepared to take charge of their financial futures. According to PwC’s 2016 Employee Financial Wellness Survey:

  • 45% of employees stated that financial issues are the leading cause of stress in their lives

  • 46% of employees spend 3+ hours a week at work dealing with personal financial issues

  • LESS THAN HALF of all employees are confident that their needs and those of their family would be met in the event of a disability or premature death

  • 65% of employees with student loans find it more difficult to meet monthly expenses compared to those without

  • Millennials and GenX employees are more likely to be attracted to a company that cares about their financial well-being.

So, it’s clear there is a need (and a want) for financial education in the workplace. Is that need being met today? Well, according to that same PwC survey:

  • 24% of organizations offered employees online financial investment/advice

  • 27% offered one-on-one assistance

  • 22% offered group or classroom financial advice.

Obviously, we have a gap here. If you are an employer or have influence on workplace benefits in your company, I would strongly suggest you consider implementing a Financial Wellness package for your employees. If you’re an employee, ask your employer to look into this!

This is a no-brainer benefit for employers to offer their employees. Financial Wellness - as an employee benefit - is extremely low cost, it will increase the productivity of employees by reducing their financial stress, it will improve the workplace culture and it will also help with employee retention.

What Should Training Include?

Just like if you were trying to transform your physical health, Financial Wellness should be programmed and done in stages. You don’t jump off the couch and run a marathon, you gradually build up to it. Same deal here.

A Financial Wellness program should start with basic financial literacy and should also aim to help the employee establish a “base camp”. That is, we should figure out what we already have and what our current situation looks like before attempting the climb.

Once we have a foundation laid, a wellness program should be able to offer guidance and education in the areas of debt reduction, student loans, budgeting, savings, retirement planning, how to buy insurance, etc.

Ideally, the program will also offer group or one-on-one education to employees. According to Liz Davidson, the founder of Financial Finesse, group education can provide the largest positive impact to an employee’s financial well-being. She equates the group education environment with the most successful life-change company in America – Weight Watchers. In a group setting, employees can be partnered up and help hold each other accountable to their plan & goals.

Employees should also be resourced with a library of content they can access on demand to help them with a multitude of financial issues. Also, whenever possible, one on one access to a CERTIFIED FINANCIAL PLANNER™ is extremely beneficial. When it comes to some things financial, there is no substitute for a professional. As mentioned above, the majority of our business clients have been able to provide this one one one access for their employees through their 401(k) platform at little to no cost.

Our program

Alright, this is the shameless plug section. But hey, it’s my blog, right? Like I said at the top, we’ve been promoting financial wellness with our own business clients for several years now.

We've helped many of our business clients successfully implement Financial Wellness through their 401(k) platform at very little to no cost.

We’ve built & fine-tuned a comprehensive online, group & one on one education package and have successfully implemented it with thousands of employees. Our program is module based, employees have access to a self-study program, group classes are offered on the premises of the employer and each employee has access to a CFP® Professional.

As I've said, most often we've implemented this program via an existing 401k chassis to help minimize/eliminate the cost to the employer.

MORE DETAILS HERE. If you’d like more information, just connect with me.

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