If your company is like most, you have employees who are carrying around a lot of stress with them tied to their finances.
In fact, if the percentages mirror what PwC found in a recent Employee Financial Wellness Survey*, close to half of them have consistent balances on their credit cards. And one-third of them are finding the stress they’ve had over financial issues increased within the last year, contributing to many finding themselves challenged to meet monthly household expenses on time.
When your people are feeling that level of consistent anxiety about financial planning, is it really enough to meet that with some basic information about how to participate in the company’s 401(k) plan?
Retirement plan sponsors are discovering the value of having a financial wellness program – the kind of financial education program that assists employees with their day-to-day, week-to-week needs and questions.
What Kind Of Wellness Is Financial Wellness?
We often think of “wellness” in the physical fitness sense, such as a challenge among a group of employees to maintain a healthy weight. If more people accomplish the goal, there’s a benefit to the company in the form of happier, healthier people who are sick less often, more productive and generally have a positive feeling about the culture they’re in. Each day and week is a small step toward a much larger outcome in the big picture of that individual’s outlook on his or her health.
In many ways, financial wellness is remarkably similar. When a person is fixated on their financial health problems – and lack of solutions for them – their performance at work can suffer.
Picture an employee who is challenged by debt or wondering how to best grow their savings in the face of never-ending expenses at home. Can you expect those same individuals to think long-term on their retirement goals when they have regular obstacles in the short-term to deal with today? Not really.
However, if you can begin to give them constructive strategies they can use for smarter saving through a financial wellness program, a long-term goal like retirement doesn’t feel so remote today as it did yesterday. In fact, it can feel quite manageable.
This is where, as a retirement plan sponsor, you have the opportunity to position plan enrollment for participants as part of a comprehensive financial wellness strategy – one that helps them work on their long-term goals for retirement as they also get the much-needed insight to address their short-term issues of managing expenses and saving.
Let’s consider the ideal outcome here: Over time, you’re transforming an employee feeling a host of everyday financial stresses and without a retirement plan into a real participant who is emotionally and financially invested in the company’s plan. By the way, this can spell only positive outcomes for retention as well because it positions your company as caring for the employee’s daily and weekly well-being. Not solely focused on a retirement goal that may be many years away.
We’re also of the strong belief that plan participants not only want to contribute more to a 401(k) plan once enrolled but that they will put forth more in contributions if they feel their present-day financial challenges are well under control.
You’ve Got A Whole New Definition Of “Wellness.”
Now What Kind Of Program Works For You?
You don’t have to evaluate financial wellness providers on your own. As your Chief Retirement Officer, I’m here to help give you some real insight on what types of financial wellness programs may work best for you to incorporate seamlessly based on a variety of factors, including:
· Cost: How is this determined and how much of the overall cost will you as an employer cover for your employees?
· Scalability: Can this program be rapidly expanded upon if your company goes through an expansion of its own, such as hiring a lot of new people?
· Service: What kind of dedicated service contacts are on our account? Can we expect regular communication from them or is it only on an as-needed basis such as if participants have a question?
· Education: Where can our people learn more about the program and the options available to them? Is it easy to find and understand?
· Ease of Adoption: When a plan provider can make a financial wellness program feel like it’s part of a complete picture that includes the company’s retirement plan, employees see it less as a separate and optional entity. The question is how well is the provider conveying this message to increase the possibilities of enrollment?
Your Chief Retirement Officer is here to help your company embrace its financial future with the right financial wellness program for you. Let’s talk more about these possibilities together sooner rather than later as it has implications for your cost, employee retention and even your culture overall. Call Fiduciary Financial Partners today at 630.780.1534.
Nick Economos, CRPS is a dedicated independent Financial Advisor and Chief Retirement Officer at Fiduciary Financial Partners. He has a wealth of expertise in designing qualified retirement plans and participant education programs.
Fiduciary Financial Partners, LLC is a Registered Investment Adviser. This blog is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Fiduciary Financial Partners, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Fiduciary Financial Partners, LLC unless a client service agreement is in place.
* Source: PwC Employee Financial Wellness Survey, 2015