The Untapped Potential of Workplace Financial Wellness Programs

Editor's note: This is the first of a series of five blog posts from the Workforce Financial Stability Initiative (WFSI) at Washington University in St. Louis (funded by the W. K. Kellogg Foundation) and Prosperity Now discussing workplace financial wellness. To learn more, visit Prosperity Now’s website for actionable resources for employers and WFSI’s website for research on approaches to building financial wellness at work.

In the world of workplace benefits, financial wellness programs are hot. Forbes named “financial fitness” one of the Seven Employee Wellness Trends and Opportunities for 2019, noting the missed opportunity of workplace financial wellness: While only 14 percent of employees had access to such benefits, 63 percent of employees with access used them and 53 percent of those without access want them.

Unfortunately, employers don’t always offer the kind of programs employees value. Recent research by the Workforce Financial Stability Initiative (WFSI) indicates that employees’ experiences with financial wellness programs vary by race and personal financial circumstances. For example, Black employees report greater concerns about confidentiality and are less likely to use programs that require a high degree of disclosure about personal financial information, like credit counseling. Employees who recently experienced a financial shock are more likely to be aware of financial wellness programs, but less likely to use them.

To break through this gap, employers need a clear picture of their employees’ financial lives and direct feedback from staff to identify relevant financial wellness programs. As an employer, AutoZone (an auto parts retailer), is growing its financial wellness programs through such engagements with employees. Several years back, the company reviewed its general wellness benefits and collected anonymously aggregated employee credit and debt data. Seeing that data got them thinking about financial wellness, especially as Prudential, the company’s retirement plan provider, offered to partner on a workplace financial wellness pilot. AutoZone started offering Prudential’s financial wellness services, including in-person financial education classes, monthly webinars and access to retirement planners and financial advisors.

Throughout implementation, AutoZone’s human resources team sought feedback from employees through focus groups and informal conversations. Pamela Samuels-Kater, Benefits Manager at AutoZone, shared with Prosperity Now that a one-size-fits all program doesn’t work because different generations and special populations have different needs and content preferences.

For example, Baby Boomers were looking at retirement and preferred to know all their options. Millennials wanted to learn basics they hadn’t been taught growing up. They preferred technology-based platforms and being given concrete to-do lists. Moving forward from these employee insights, AutoZone is working closely with Prudential to meet these different requirements and implement more web-based interactions. It’s also tailoring programs to special populations such as working women, single-family households and starting families.

As the AutoZone example illustrates, when employers learn more about what employees experience and prefer, they also need to consider offering a mix of programs. Considering different types of content is important, but so is crafting a mix of “high-touch” and “low-touch” programs that offer direct, immediate resources as well as support for achieving longer-term goals. “Low-touch” offerings, such as wage advances, small-dollar installment loans and incentivized savings nudges, are generally more affordable for employers and might be more feasible to implement. In contrast, “high-touch” offerings, such as financial coaching and credit counseling, entail more direct involvement with employees and are more expensive. However, they are potentially more effective in promoting financial behavior change and certain financial outcomes. 

The next two posts in this series (coming February 27 and March 6) will dive more in depth into each of these categories. We’ll share more about their costs and benefits as well as stories from employers who are offering the programs at work. In the meantime, if you’re looking to start or grow a workplace financial wellness program, check out these tips.

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