Getting Financially Fit

New research finds employers are stepping up to help workers become more financially savvy as they embrace the role they can play in helping to improve their workers' financial well-being.

Thursday, April 27, 2017
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Personal fitness trackers, onsite gyms, and standing desks have all become standard components of workplace wellness programs, as employers recognize the value of empowering their workers to become more physically fit.

But what about financial fitness?

According to the eighth annual Survey on Corporate Health and Well-Being from Fidelity Investments and the National Business Group on Health, 84 percent of companies now incorporate financial security offerings, such as debt management tools and student loan counseling, into their well-being programs. That's up eight points just since last year.

"As these programs evolve, employers are embracing a broader definition of well-being," says Adam Stavisky, senior vice president of Fidelity Benefits Consulting in Boston. "Today's programs take more of a health-meets-wealth approach and reflect a blend of financial, physical and social/emotional programs to provide maximum support."

Recognizing that financial stress contributes to poor physical health requires a significant shift in mindset for employers, according to Cynthia Meyer, Resident Certified Financial Planner and member of the Financial Wellness Think Tank at Financial Finesse, an El Segundo, Calif.-based provider of customized workplace financial wellness programs. Evidence exists that financial stress contributes to stress-related illnesses, she says, leading to higher health expenditures for employers. But the costs don't end there. Meyer cites higher FICA taxes because employees with lower financial wellness put less money into tax-advantaged accounts, such as HSAs or FSAs, than their more financially astute colleagues. Additional costs are harder to measure, but no less of a problem for employers.

"People with lower financial wellness are not as engaged as employers would like them to be," says Meyer. "If you are worried about paying your electric bill because your service got turned off, you're not paying attention to what you are supposed to be doing."

Across the board, interest in providing employees with financial counseling and education is surging, says Shane Bartling, a senior retirement consultant in the San Francisco office of Willis Towers Watson. Employers are recognizing the role they can play in helping to improve their workers' financial well-being and they are "actively reexamining the services they provide their employees to further enhance those programs and the benefits that are being delivered," he says.

Financial seminars and lunch-and-learns remain the most popular means of delivering information, with 82 percent of survey respondents indicating they employ such strategies, while 74 percent provide resources to supply key financial decisions such as mortgages, wills and income protection, and 60 percent give employees access to one-on-one financial planning with an advisor or coach. Just 25 percent provide student loan counseling or repayment assistance, but 28 percent say they are considering doing so in the future.

According to LuAnn Heinen, vice president of the National Business Group on Health in Washington, employers have ramped up their financial wellness offerings in direct response to "internal indicators," such as the number of loans employees are taking against their 401(k) account or how many workers are having their wages garnished.

At Charlotte, N.C.-based Movement Mortgage, helping employees develop a better financial grounding ties into the company's mission statement "to love and value people." Last year, the company decided to tackle the issue of debt by launching a 90-day challenge it called "Lose a Million." Unannounced, each employee was sent a copy of Dave Ramsey's New York Times bestseller titled, The Total Money Makeover: A Proven Plan for Financial Fitness, and encouraged to complete a financial wellness assessment on the Financial Finesse website. That was followed by a series of emails linking to 15- to 20-minute videos in which Ramsey discussed debt reduction strategies, budgeting, and personal financial planning.

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Employees and their spouses were also invited to have dinner, watch a presentation by John Putnam, author of a book titled He Spends, She Spends: Why God Wants You to Live for Free, and take a "deeper dive into why they had made the money decisions they had," according to Aimee Dodson, Thrive director.

At the end of the three-month period, employees were encouraged to participate in a survey to "self-report their progress." While just one-quarter of the employee population completed that final step, the results were overwhelmingly positive. Those 800 people paid off $2.8 million of consumer debt and saved $1.4 of "emergency money" during the 90-day challenge.

This year, the company set out to replicate that success with a program designed to encourage more employees to take advantage of the full company match in its 401(k). By the end of the Save a Billion program, 60 percent of employees were contributing at least 6 percent to their 401(k), up from 25 percent just one year ago.

"Once employers realize this is a problem, they feel empowered to do something about it," says Heinen. "That's something that resonates with employers: 'If this is something employees need, we've got this.' "

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