Tips to Strengthen your Financial Well-being Strategy

When asked how their employer can better support their well-being, U.S. employees prioritize financial health.

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November 04, 2021

This guide presents the business case for offering financial well-being programs and benefits not only in the United States but also around the world.

Think beyond retirement to address employees’ most pressing financial needs: Although saving for retirement is the top priority for employees who are financially secure, it’s far less a priority for employees with financial worries.1 Areas where employees in the U.S. have said they would like more employer-based support relate to current financial concerns and social determinants of health, such as lowering health care and prescription costs, assisting with housing and transportation costs and managing student loan debt.2  Financial well-being strategies that may best help employees will likely include a combination of benefits, programs and policies that focus on alleviating their day-to-day concerns, as well as help preparing for the future.

Employees in the U.S. have identified the following financial areas in which they would like to have more help from their employer:2

  • 34%, lowering health care and prescription costs;
  • 26%, housing costs;
  • 21%, transportation costs;
  • 20%, managing student loan debt;
  • 19%, developing a budget;
  • 19%, resources for childcare needs;
  • 18%, maximizing HSAs
  • 18%, accessing earned wages before payday; and
  • 11%, saving for retirement.

Design financial well-being benefits and programs with your population in mind: Key questions to consider when developing your strategy include:

  • What’s the demographic profile of your global workforce (e.g., low-wage earners, high-income potential employees, recent grads)?
  • What are your employees’ biggest financial challenges (e.g., lack of emergency savings, inability to meet monthly household needs, student loan debt)?
  • If and how do employees’ financial challenges differ based on gender, race and ethnicity, sexual orientation, marital status, wage band, job classification, country or region? How do they differ when assessing across intersectional identities (e.g., Black female employees)?
  • How are social determinants of health, such as income, housing instability, food insecurity and racism, impacting the financial - and overall - well-being of your employees?
  • Are there disparities in participation in financial well-being programs and benefits across gender, race and ethnicity, sexual orientation, etc.? If so, why?
  • What relevant public and private programs are available to employees?

Use this information, which can be gleaned from financial well-being assessments, focus groups, employee resource groups, HR data and publicly available information, along with a consideration of your company culture, to understand the needs of your workforce, including how they may differ based on different employee segments. This assessment can be used to design new initiatives, enhance existing programs and/or target or tailor communication to best meet employees’ needs.

Prioritize equity and inclusion

Globally, there are racial and ethnic disparities in job stability, pay and wealth. Thus, to create inclusive financial well-being initiatives that seek to reduce gaps in financial security, it’s critical to understand the disparities that exist in your workforce and implement solutions to combat them. Employer actions may span from paying a living wage and conducting regular pay equity audits, to providing employees with access to no-fee banking services and helping them secure advantageous credit rates, to assessing how current and future financial vendor partners are addressing equity and inclusion (e.g., Do vendors have a diverse network of financial coaches or counselors? Do vendors – including their coaches and counselors – have expertise in racial financial inequities and are they prepared to offer guidance to address these disparities? Do vendors offer services in multiple languages?). For additional actionable ideas, see Social Determinants: Acting to Achieve Well-being for All.

Consider how your health care benefits may impact the financial security of lower-wage employees

As premiums and deductibles continue to rise, think about developing strategies that reduce the financial burden on low-wage employees, such as wage-based cost sharing (e.g., premiums, deductibles, out-of-pocket maximums), which 40% of employers have in place in 2021 to reduce health inequities. Also, assess incentive strategies to ensure that low-wage workers have ample opportunity to earn incentive dollars (e.g., by offering time on-the-clock for incentive-related activities).

Use auto enrollment to promote participation in savings opportunities

Evidence shows that autoenrollment can be an important way of getting people to save for the future, with one study showing that it almost doubled participation.4 It can also be useful tool for participation in other savings accounts, like emergency savings. And the good news for employers is that 42% of Americans say they want to be automatically enrolled in emergency savings, with an additional 14% saying they’d be open to it.5  Beyond autoenrollment, studies also demonstrate that auto-escalation can be helpful for increasing the accumulation of retirement savings.4

Focus on action, not just education

Studies have found that financial programs designed to help participants take action to address personal finance concerns (e.g., building short-term savings, paying down debt) are far more effective in reducing financial worries compared to programs focused on education (e.g., reviewing retirement savings).1

When assessing programs, consider if they offer expertise in multiple topics (e.g., budgeting, reducing debt, estate planning, retirement, etc.)

The decisions employees make in one area of their financial life may impact other areas; programs that offer functionalities or expertise in a variety of disciplines may help employees navigate their financial journey smoothly. 

Does your financial well-being strategy enable employees to address their specific needs and goals? Personal relevance is important, as “generic guidance or absolutes impede engagement".

Paul Clickman, Senior Vice President, Corporate Development Group, Ayco

Consider words carefully

When rolling out your financial well-being initiative, think about the words that may resonate with your audience – and those that don’t. “Finances,” for example, may not mean much to your population, but “money” may.

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