In today’s competitive job market, benefits can be a decisive factor in attracting and retaining top talent. While perks like paid time off have previously been popular, a shifting landscape reveals changing preferences. According to a survey by Employee Benefit News, 68% of employees would now prefer a financial wellness benefit over and above more PTO. But can you find affordable financial wellness programs that actually move the needle on employees’ financial health?
Get independent and actionable financial education for your valued team with Wavelength’s high quality and affordable solution!
Employee Financial Education Takes Center Stage
The rationale behind this surge in demand is not difficult to grasp. Financial stress is, unfortunately, everywhere. Employees burdened by financial worries and financial challenges are less focused, less productive, and often face health issues that can lead to increased absenteeism. Offering a financial wellness program is no longer a ‘nice to have’ but rather a ‘must-have’ for companies aiming to create a genuinely supportive work environment.
What About the Steep Costs of an Employee Financial Wellness Program?
This emphasis on financial wellness indicates a growing awareness that financial stability plays a crucial role in overall well-being. And with the recent rise of inflation and return of student loan payments, the spotlight on these programs is brighter than ever.
However, according to industry research, many of these programs are prohibitively expensive. A report by the Employee Benefit Research Institute (EBRI) highlights that the average cost of financial wellness programs can range from $35 to $40 per employee per year for basic services and up to $150 for more comprehensive offerings. This can be a significant investment for small businesses, particularly those with tight budgets.
Furthermore, a study by the National Association of Plan Advisors (NAPA) found that 50% of small businesses consider cost as the primary barrier to implementing financial wellness programs. especially in times of economic uncertainty marked by inflation. So, how can you find an affordable financial wellness program for employees that really works? Can you educate your team and increase productivity without overspending? The good news is yes! This article will provide you with the insights needed to make an informed decision about online financial wellness services and other financial tools.
Easily Navigate the Crowded Vendor Landscape
While it might be tempting to focus only on costs, that’s not necessarily wise either. The market is flooded with financial wellness programs, each claiming to be the best. And many companies offer free financial wellness. What’s the catch? Usually, these organizations offer products, so the education is not necessarily independent. In that case, your employees may be subject to a veiled sales pitch along with the education provided on financial topics.
Is that a big deal? Well, it certainly could be. As the sponsor of the retirement plan, you and other principals of the company are likely considered fiduciaries of that plan. That means you have significant liability to put the participant’s interests first. While getting free education may save the company money, that may mean the education has some marketing element that may not be in your team’s best interests.
The Critical Importance of Independent Education
On the flip side, providing independent education can be a really smart move. That’s because in recent years, the entire retirement plan landscape has been plagued with increasing litigation. Since there’s alot at stake, a little defense can be wise. If you provide independent, high quality education to employees that explains retirement investing and helps employees understand fees and costs, that can show good faith if you are faced with any type of legal claim over your retirement plan.
It’s smart to not underestimate this risk, either. Plans of all sizes have been hit with lawsuits. And there’s few signs of that stopping. In fact, some aggressive attorneys are attempting to negotiate settlements before even filing a lawsuit in court.
Finding a Financial Wellness Platform that Makes Sense for Your Organization
The key then is to identify a financial wellness provider that is independent and conflict-free. Ideally, you want a program that puts top priority on allowing employees to access help on computer or on their phones. Additionally, here are some other things to consider:
- User-Friendliness A Bank of America/Merrill Lynch study highlights a key factor in the success of these programs: user-friendliness. Programs must be intuitive and accessible to all employees, regardless of their financial literacy or tech-savviness. This inclusivity ensures that every employee can benefit from the program, ultimately leading to a more financially stable and productive workforce. So be sure the program you choose is written in conversational, clear, and easy-to-understand language. Also be sure that the technology is simple so it doesn’t serve to simply intimidate or irritate users who want actionable information on personal finance without having to dig too deeply.
- Topics Covered There’s a clear demand for assistance in areas beyond the basics, particularly in investing and saving for the future. The same Bank of America report indicates that most financial wellness programs offer only a superficial treatment of these topics and instead focus on more short-term issues such as credit scores and budgeting. However, the fact is that there are literally thousands of sources out there that talk about those basic topics. In contrast, there are fewer approachable ways for employees to learn about more advanced topics concerning investing and financial services. Fortunately, some programs do include detailed education on investing, covering everything from risk management to asset allocation and the psychological aspects of investing. This depth of content empowers participants, demystifying the complex world of investing. And as importantly for the employer, you want a program that is designed to help your workforce successfully retire on time. What other topics should be covered? Along with investing, understanding investment expenses, retirement, financial planning, and debt management, other important concepts that are helpful are education on insurance, healthcare expenses and college savings. Overall, make sure the financial wellness program provides for the issues of lower-income employees but also helps employees across the board learn about the benefits of saving and proactively preparing for retirement.
- Cost – What Fits in Your Budget? Finally, cost obviously is a critical issue for many organizations. Be aware that along with high-priced comprehensive programs, there are some more affordable financial wellness options out there as well. Make sure you’re not overpaying for extras you don’t absolutely need. For example, while 1-on-1 financial guidance, financial counseling or financial coaches can be a great benefit, it may not be affordable at the outset. Additionally many employers find those services are often underutilized. So a great way to save is to avoid overpaying for services that aren’t necessary.
Frequently Asked Questions
- What are the cons of workplace financial wellness programs? Of course, a financial wellness solution can help participants reach their financial goals. In today’s litigious landscape, however, you need to make sure the program you are providing will not create liability. That’s why we recommend providing a program that addresses the critical topics of investing basics, investment expenses and retirement planning. These are hot-button issues, so providing objective education on these subjects might be a potential way to prevent future liability. Then, of course, the cost factor is important. Any resources you put toward this purpose should work toward the overall financial health of your team and help them manage their money.
- How can we provide financial education resources without breaking the budget? The best advice? Start small with your wellness initiatives. Consider cost-effective digital platforms that offer actionable help at a lower price point. You can always add on personal financial help or counseling services at a later time.
In conclusion, while it can take some effort to find an affordable and effective financial wellness program, the benefits far outweigh the challenges. By focusing on independence, user-friendliness, cost, and the right topics, you can provide the help your employees need to achieve financial well-being, which is a win-win for both your team and your entire organization.
Get independent and actionable financial education for your valued team with Wavelength’s high quality and affordable solution!
