A Holistic Approach Improves Employee Financial Wellness

Financial wellness – it’s a concept that should be a logical next step for credit unions. Since many already offer financial education to their members and (physical) wellness programs to their staff, doesn’t it make sense to bring the two together in the interests of a more holistic approach to their employee benefit and wellness programs?

Financial wellness is becoming a focal point of many U.S. employers’ benefits – over 80% offer some sort of program to address the financial pain their people are feeling, according to Pensions & Investments. There’s a reason for that: Employers of all sizes and in every sector – including credit unions – are sharing the pain.

One study said 42% of the 5,000 employees surveyed were worried about money matters, half saying they lived paycheck to paycheck. And everyone’s paying the price: People who are financially unwell missed more work, 4.4 days, and racked up another 12.5 days in on-the-job disengagement. The financially stressed also tend to let their eating and exercise habits slide, which contributes to another price to be paid in rising health care costs.

For all the increased recognition that employers are giving to the financial stress affecting our population, the solutions to address the problem apparently aren’t sufficient. Only a third of those the programs are offered to make use of them – with relevance cited as a factor, most likely because the programs are tied to only retirement planning.

Credit unions can buck that trend by framing their employee wellness programs more holistically and making financial wellness – which already should be familiar ground – as important a cornerstone as diet and exercise programs.

It starts by advancing beyond the cookie cutter solutions – generic group workshops with one-size-fits-all budgeting calculators that too many organizations sign up for in bulk and call it a day. The fact is that your employee base may draw from as many as four different generations, and life stages, income levels and family dynamics all influence your employees’ finances and how they deal with them. And not every group wants to access solutions in the same way. Financial wellness programs that are tailored to their particular needs will help them the most.

Overall, your program should be structured to respond to the types of financial issues each group tends to be grappling with, and solutions should be delivered in a user-friendly format – considering the preferences and comfort level of each age group. Your solutions, whether sponsored or provided as low-cost voluntary benefits, should fall into three broad categories of issues: Debt management, asset protection and retirement planning.

Here’s how it might be structured:

Millennials and the Pain of Student Loan Debt

As millennials (born from 1981 to 1996) are heavily burdened with student loan debt, any assistance you can provide in managing, consolidating or paying it down (via digital, preferably mobile, channels) will be valued. Many employers have made sponsored student loan management/repayment programs a great benefit that have also boosted recruitment and retention. This group (along with others) also needs to be encouraged to think about retirement planning. One attractive option is to provide plan participants income replacement software tools that show saving levels vis a vis their account balances and ages in order to build a paycheck for life at retirement age.

The Multiple Pressures on Gen Xers

Gen Xers (born from 1965 to 1980) are sometimes called the “sandwich” generation given the financial pressures they juggle around their parents in retirement and their children as they get ready for college. They prefer digital resources to help them manage their finances, like access to websites that offer basic money courses. They may also struggle to come up with cash for emergencies, making employee purchasing programs attractive to sponsor. Administered through payroll deductions, these cost employers nothing as they make big ticket purchases affordable, incurring no credit card debt or extra charges.

Can Baby Boomers Afford Retirement?

Baby boomers (born from 1946 to 1964) increasingly worry about retirement readiness. Resources that will most appeal to them will be online or one-on-one coaching. Many are seeing a gap in their retirement savings as the Great Recession took a toll from which many are still recouping. It’s made budgeting to reduce debt one of their challenges. Better investment management as retirement nears is another, along with planning for long-term care costs. In addition to money management coaching, particular products are attractive to this group, like employer funded long-term care benefits (and they also offer tax advantages for employer and employee).

Structuring a financial wellness program that bolsters your overall emphasis on wellness is one thing. But some 70% of employers can’t necessarily say theirs are working, according to Forbes. The place to start with your metrics is where you start any time you need insights into targeted audiences – with a baseline survey. In this instance, it would shed light on specific financial pressure points and needs of your employee groups and signal the way for programs and services that would help. Future surveys could gauge their progress over time, aided by tracking of hard data, like absenteeism rates.

The financial wellness of today’s workforce is a burden that everyone shares. Employers who take it upon themselves to address the issue with solutions that are useful and relevant will go a long way toward improving everyone’s fortunes over the long term.

Michelle Clark is SVP, Health & Performance for Hub International. She can be reached at 312-​279-2101 or michelle.clark@hubinternational.com.