How Is Your Financial Wellness Program Stacking Up Against Your Employee’s Needs?

Employers must measure the effectiveness of financial wellness programs to ensure support for all employees

Financial wellness is not a destination. It’s a journey. And a very challenging one for so many in our society. Unfortunately,  today’s ongoing economic uncertainty is causing unexpected roadblocks for some and exacerbating longstanding issues for others. 

As cited in Purchasing Power’s State of Employee Finances report, more than half of full-time employees were either unable to cover monthly living expenses or lived paycheck to paycheck. 

Surprisingly, this isn’t exclusive to low-income earners. 

In fact, one 2022 survey found that 64% of employees with an annual household income greater than $100,000 lived paycheck to paycheck. That same income group said they were struggling to keep up with monthly bills, up 16% from 11% the previous year.

The result is continued blurred lines when it comes to financial wellness. Higher income households still living paycheck to paycheck is reducing the number of thrivers in the American workforce, or those living comfortably with money saved for emergencies and retirement. 

Instead, more employees are operating more as survivors – comfortable for long-term, but ill-prepared for an emergency – and even more as strugglers, having trouble meeting their day-to-day financial needs. 

To address the need for greater financial support and to circumvent the economy’s impact on employee’s day-to-day lives, employers must recognize the situation and, more importantly, take action. In fact, nearly 9 in 10 employees expect their employer to offer access to financial support and resources. 

The Immediate Need

Traditionally, employers provide only long-term focused financial wellness solutions like 401k and healthcare saving accounts (HSAs). While these are great for thrivers, the paycheck-to-paycheck population  aren’t as able to or equipped to afford or take advantage of these offerings. 

Employers must therefore seek to provide a comprehensive and inclusive suite of benefits that include immediate financial wellness solutions. These solutions can include employee purchasing programs, earned wage access (EWA), financial coaching, and more. And many of these are available to employers and employees at no cost. 

While pursuing a financially effective and inclusive financial wellness program is critical to being an employer of choice, it requires commitment and planning. It is important to profile and identify the needs of the workforce and understand the types of support they need.   Employers must seek to meet employees where they are and they must then act and implement such programs. 

Then, employers must communicate the programs via channels that reach all employees, like newsletters, flyers, or in face-to-face meetings. If employees aren’t educated on the programs available or are hesitant to participate in the programs because of confusion around how they work, the programs won’t be effective.

Lastly, employers must measure the impact of the programs.

Measuring Financial Wellness 

No matter how great a financial wellness program is perceived to be by the employers designing them, they are not a “build it and they will come” type of initiative. Rather, these programs need to be regularly evaluated and adjusted to meet employee’s changing needs, allow for program refinement, and to prove to the workforce that their employers are listening. 

Start with Objectives
To best measure the effectiveness, employers should first define the program’s objectives. Start by asking a few questions, such as:
 

• What do you want a financial wellness solution (or solutions) to do?
• What solution would work best for your workforce? 
• Are your employees dispersed or concentrated in a single area? 
• What are you currently offering? What does your approach to wellness look like – mental, physical, and financial? 
• Do your current providers offer financial wellness solutions? Are they helpful for low- and middle-income earners?

With a full-picture understanding of a program’s capabilities and the needs of the company’s workforce, clear quantitative and qualitative objectives can be set and monitored.

Identify the Right Data
Quantitative metrics can be gathered and monitored through several methods. First, registration or enrollment into the offered programs should be regularly monitored, and if it’s lower than desired, take a closer look to understand if it’s because of a lack of communication about the offering or if it’s a lack of need.

Enrollment, participation, and contributions in long-term programs should be monitored, too, and tracked against participation in the offerings focused on immediate support.

Employers can also gather insights through a regular employee survey to take a pulse on their financial wellness and outlook for the coming quarter or year. And, of course, metrics like absenteeism, turnover, and productivity should also be measured to identify the extent of how financial wellness – or lack thereof – is taking a direct toll on the workforce. 

From a qualitative perspective, regular check-ins and conversations about the impact of these solutions will give employers direct insight into what is and is not working. Having these open conversations give employees the opportunity to be heard and have their situations understood.

Report Regularly
Once these insights have been gathered and conversations have been had about the effectiveness of inclusive financial wellness programs, employers should report on this internally. 

Select a cadence that makes the most sense for the organization, whether that be annually, bi-annually, or quarterly, and share stats like change in stress levels or impacts to productivity and turnover. Show employees that the company is listening and acting, that the offerings are having a positive impact and that the employees are not alone in their struggles because everyone is benefiting.

It's Not Too Late to Get Started

Many companies may already be offering immediate financial wellness solutions, some may just be getting started and some may not have considered it yet. Regardless of where a company is on this journey, it’s not too late to get started or to keep improving.

The process doesn’t have to be complicated. Simply talk to employees and understand what they need. Identify and implement the solutions needed, tapping third party organizations for help as needed. And empower employees in their personal financial wellness journeys.

Assad Lazarus is Chief Client & Development Officer at Purchasing Power®. In this capacity, he oversees all operational and strategic activities representing the spectrum of business products and services for the company’s client base.