5 Financial Wellness Programs for Savvy HR Leaders

May 13, 2021 John Larson

HR leaders have long been focused on important aspects of their employees’ financial health — and that focus was only heightened by the events of the past year. In fact, an April 2020 survey revealed that 88% of Americans felt that the COVID-19 crisis had caused stress on their personal finances. A Bank of America survey conducted around the same time revealed that employers were feeling their pain with 62% feeling "extremely" responsible for their employees' financial wellness, up significantly from just 13% in 2013. 

Rather than simply paying an employee a wage for the hours they’ve worked, employers have long understood that people want and need more financial security for themselves and their families. The COVID-19 pandemic only increased this focus — but it also caused employers to rethink their financial wellness offerings through a new, more urgent lens. 

Last fall, a MetLife survey on benefits open enrollment underscored the elevated importance of financial benefits: 

  • 69% of employees said improving their financial health was one of their most important goals  

  • 45% said they felt insecure about some aspect of their finances  

  • 61% revealed they have trouble saving for retirement 

In juxtaposition to this, government programs designed to help people manage their finances during the pandemic may have left them more financially unwell in the long term. For example, the CARES Act, which relaxed early distribution and loan withdrawal rules on certain retirement plans was convenient and necessary at the time — but it left 70% of employees feeling less prepared for their golden years. 

Modern financial wellness programs can change the game 

Savvy HR leaders and plan sponsors are taking advantage of modern financial wellness plans that put more control in employees’ hands — and help them become more financially secure while also protecting the company’s bottom line. Some of these programs include: 

  1. Financial planning and advisory services: The major objective of offering financial advice is to help employees reach their goals for every stage of their “financial lives,” whether it’s real-time decision-making, saving for a major purchase, reducing debt, or planning for retirement. Robo-advisory services can be a smart addition to this toolkit — providing financial advice with moderate to minimal human intervention. Combining high-tech and high-touch solutions allows employees to engage via their preferred mode of interaction. 

  1. Integration between HSA and 401(k)Today’s most sophisticated employee benefits platforms help both HR and employees get the full picture of their company-sponsored plans, regardless of how and where those plans are administered. This can be incredibly helpful to employees as they navigate the best ways to make the most of their savings, their employer contributions, and the tax advantages of these high-value benefits offerings. Enabling employees to move their hard-earned dollars among plans via one interface can help them get a better handle on their savings and make the most out of these plans. 

  1. Budget management toolsRegardless of an employee’s job level or role, there are financial management tools and resources that can help them feel more confident about how to spend their next dollar — as well as modeling tools for evaluating bigger financial decisions such as purchasing a vehicle or planning for their children’s college education. 

  1. Emergency fundsStudent loan repayment and emergency savings plans such as Roth IRAs or other after-tax plans are becoming more common vehicles through which employees find additional support to achieve their savings goals. 

  1. Total rewards statementsGiving employees a complete picture of their total rewards is a great way to build employee trust and influence retention. It shows employees that the company is investing in them “beyond the paycheck” with a full view of salary, bonus, incentives, health benefits, 401(k) match, company HSA contributions, wellness programs, paid time off and more. 

Integrated data is the key to success 

By aggregating the employee data you have into a single system — such as income, dependents, 401(k) data, health plan usage statistics, Health Spending Account info, pension details and more — a clearer financial profile for each individual begins to emerge.  

Then, HR leaders can create a customized toolkit for each employee that can be automated through machine learning and AI and accessed through a single employee benefits portal. By supporting employees’ financial health through savings vehicles, direct contributions to accounts, budgeting and financial modeling tools, and customized communications and offerings based on personalized data, HR leaders can add value to the employee experience and save money over the short- and long-term. 

Financial wellness tools and targeted communication programs help employees make better choices about their finances and more effectively plan for their future. When they understand the value their employer delivers in a more comprehensive way, they’re more likely to stay with the company long-term and contribute more over time.  

Learn more about solutions to support your employees’ financial wellbeing. 

About the Author

John Larson

John is the General Manager for Conduent’s Financial Benefits Solutions supporting clients with their Defined Benefit and Defined Contribution plan administration.

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