Employee Financial Stress & The One Question Employer’s Need To Ask

We have become painfully aware that financial literacy levels in the US are dangerously low & many people lack confidence in their ability to effectively manage their personal finances.

A recent SHRM article highlighted the results from the Financial Education for Today’s Workforce 2016 Survey.  Employers—typically, HR benefit managers—revealed that their workers are struggling and stressed over:

  • Debt (66 percent of respondents)
  • Saving for retirement (60 percent)
  • Saving or paying for children’s education (51 percent)
  • Covering basic living expenses (48 percent)
  • Paying for medical expenses (36 percent)

The article further went on to share that to help combat these issues, IFEBP found that employers are offering some of the options below via financial services companies:

  • Benefits literacy education (49 percent)
  • Retirement security education (45 percent)
  • Financial literacy education (23 percent)

The troublesome reality is that some financial services companies providing the “solutions” above, simply use the concept of “financial wellness” as a marketing strategy.

The topics they cover in these trainings include investments, savings, insurance, budgeting and identity theft, as well as retirement-focused issues such as retirement plan benefits, pre-retirement financial planning, retirement plan distributions and retiree health care.

While there is promise with the growing attention from the financial planning profession, when an employer decides to provide financial education as a voluntary benefit, a key question that an employer should ask a provider is “does all of your revenue come directly from providing “financial wellness” services?”

If the answer is yes, this points to potential conflicts of interest.

When “financial wellness” programs are packaged as financial technology solutions such as a website with static calculators, reading modules and videos; these tools and apps are all useful to some degree, but without a personalized plan and customized coaching for the employee, these resources tend to be underutilized and not impactful.

I invite you to take into consideration the notion that the percentage of people experiencing the financial stress and struggles are doing so because they are living outside of their means potentially by choice, but more so because of habit. These habits leave them sleep deprived, exhausted, dis-engaged, unproductive, unhealthy and dependent upon substances and prescription medications which all increase an employer’s costs.

To help the employee address their financial burdens it makes more sense to prime their minds and increase their chances of success by offering empowering support to help the employee not only determine and gain an understanding of the precise moment, as to when and why the habit developed in the first place – AND THEN offer enhancement benefits – mindset programs, such as, mentorship, daily support and effective cutting edge, enhancement benefit tools, steeped in science by leading industry experts. These programs inspire and motivate employees into action with proven results and a greater ROI. Once this step is complete, THEN usher in the traditional voluntary financial education benefits.

To offer the reverse is simply putting the cart before the horse or can be compared to putting a band aid on a wound prior to cleaning it.

To learn more or to have a complimentary, exploratory call about the difference between traditional Voluntary Benefits and Enhancement Benefits and how to best serve your company and employees for a more engaged, healthier, happier, mindful, safer and profitable environment contact Pamella Horton


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