There is no doubt, employers and employees both say financial wellness programs are proving successful in engaging workers and providing ROI, however, a disconnect on what matters most in fiscal health could create a few hiccups in crafting a winning strategy.
Only one-third of employees are participating in these financial wellness programs, despite the fact that many say they are struggling, says the newly released 2018 Bank of America Merrill Lynch Workplace Benefits Report.
And financial fitness can heavily influence an employee’s goals and how they focus. For example, according to the report, employees who feel financially stable are more concerned about long-term goals versus their more stressed colleagues who are looking at the short-term goals.
For workers who say they are do not feel financially well, 44% say they are concerned about managing debt compared to 20% of those workers who say they do feel they are better off.
In contrast, 38% of financially well employees say they are preparing for retirement compared to 21% of employees who don’t feel financially fit.
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“Employees are speaking loud and clear about their desire for programs that give them a holistic, personalized and measurable roadmap for achieving financial wellness,” says Lisa Margeson, head of retirement client experience and communications at Bank of America Merrill Lynch.
Employers tend to focus on actions to manage immediate financial needs, such as budgeting and handling expenses, according to the study. Meanwhile, employees mostly prioritize long-term financial goals, such as tactics that help them save and invest for the future.
The report finds workers are looking to their employers to help manage their financial lives, shining a light on what employees seek in an employer-sponsored financial wellness program.
Employees feel the best approach to improve financial wellness is getting a personal financial assessment, supported by specific actions to take. Additionally, employees would also like help measuring their progress, through tracking and measuring of accomplishments.
Eighty-one percent of employees also say they prefer that financial wellness be offered as a bundled program rather than as stand-alone resources.
“Employers report financial wellness programs are paying off — leading to greater employee satisfaction, higher productivity and other benefits for employees and the firms they work for,” says Lorna Sabbia, head of Retirement and Personal Wealth Solutions at Bank of America Merrill Lynch. “However, there is still room for progress in increasing employee participation.”
While employees understand most of the factors that directly affect their financial wellness, the majority ignore one of the biggest factors — healthcare costs, providing employers an opportunity to help workers.
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Only 7% of employees identify healthcare as an important building block of financial wellness, yet 53% have skipped or postponed at least one healthcare need (e.g., medical appointment, purchasing medication) to save money.
And HSAs are also an area where employees can use some more help in understanding. While 76% of workers say they understand HSAs, only 12% could correctly identify common attributes of the savings accounts, the study notes.
“HSAs are a missed opportunity,” the study authors say. “Education is key for employees to better manage healthcare expenses and fully utilize their healthcare benefits, including HSAs.”
