From Advice To Action, How HR Leaders Are Changing The Landscape Of Financial Wellness Benefits

Increasing utilization today and providing options for a healthy financial future

It’s a busy time of year for human resources (HR) leaders in charge of employee benefits. With open enrollment surveys underway, critical discussions about the impact of this year’s benefits package will determine what benefits each business will offer its employees in 2025. This process is more important than ever this year, as a high percentage of employees are anticipating a job switch, with wages no longer sitting atop the priority list for this change. For HR leaders, it’s essential to gather a well-balanced and equitable benefits package, but this is the year that financial wellness benefits must change. Both businesses and their employees are impacted by inflation, but those employers who can identify and onboard the next generation of actionable financial wellness benefits can retain their talent and likely attract top talent from around their sector.

 

Do Employees Really Know What Falls Under “Financial Benefits” from the Employer Side 

Most employees consider common financial wellness programs as just a part of their total compensation, and in the past, they have largely been positioned as such. Offerings such as 401K matching programs, student loan repayment opportunities, and pension plans have been around for decades, all of which improve employee wellness at a slow pace and are entirely passive. Beyond these slow-drip benefits, one popular offering has been informational courses offered by employers either through their HR department or via an external partnership. However, as courses such as these provide a unidirectional flow of information and, in many cases, are being implemented at the collegiate and high school levels, it’s time to rethink how financial wellness is approached by employees. Actionable programs, such as those offered by Delta Airlines, are a prime example of how financial wellness can be transformed into an active benefit that employees can tap on any given day.

The Gap That Remains in Financial Benefits

The information age has advanced our ability to manage personal finances in incredible ways, connecting mobile, web banking, virtual bank branches, and even AI assistants that can help you complete complex tasks such as mortgage applications. With all of this technology at our fingertips, it makes sense why financial literacy could seem like an attractive offering, but as mentioned, this educational aspect of financial wellness is covered for many before they even enter the workforce. 

In my previous article, I outlined the perspective shift that will be required to reach the next generation of employee benefits. This is exactly the case with financial benefits, and businesses know that actionable technology is the way to a better financial future. Investments in spend management platforms such as Coupa have revolutionized accounting and finance departments across industries, yet individual employees are left to review a presentation on how they should better handle their finances. The gap that exists today is not in the technology itself but rather in the application of financial wellness solutions within the benefits space. It’s time to transform from providing information as a benefit to providing actionable tools to employees that can aid them in being more financially wealthy on a daily basis.

What Can HR Leaders Do? How Do They Improve Today and Plan for A Decade From Now

First and foremost, HR leaders need to recognize that their role is about to change if it hasn’t already. Employees want more than just healthcare plans and 401K matching opportunities. They’re seeking tools that they can use daily, both in and out of the office. Within the realm of healthcare, employers are continuing to offer actionable benefits such as company-sponsored gym memberships. However, researchers have found that these sorts of benefits are underutilized. The reason? Employers aren’t communicating the availability of these benefits and may not be transparent enough about how exactly employees can and should take advantage of them.

To minimize the potential for miscommunication and ensure both business and employees are getting the most out of the benefits they’re paying for, HR leaders will have to step up their understanding of the company’s employee base. Heading into open enrollment season, here are a few questions HR leaders need to ask before signing off on their new benefits package:
 

• How many of our employees identify as caregivers? Are most of them parents? If not, what benefits may align with their needs as caregivers?
• What percentage of our employees are considered Gen Z? What benefits are we offering them that might entice them to stay or refer their friends to consider working with us?
• With 66% of Americans living paycheck to paycheck, how many of our employees may be in this situation? How can company-wide benefits help those in this situation and prevent others from falling into it?

I acknowledge that given regulations around employee rights to privacy, it may not be possible to directly ask these questions as a part of an employee survey, but there are other avenues to gaining a better understanding. Hosting an open forum on benefits or offering incentives for leading employee resource groups can help HR leaders gain a more honest understanding of who is working for them.

The Healthy Future of Financial Wellness Benefits

Employee benefits will be one area of work that will forever be a delicate balancing act between employers and employees, consistently evolving as the workforce does. This year, the volume of Gen Z workers will overtake boomers. This generational handoff provides HR leaders and executives the perfect opportunity to get creative and rethink their benefits package from a total compensation perspective. Financial benefits can come in nearly endless forms, the value of each determined by individual employees. If you’re an HR leader struggling to figure out where to start, I encourage you to take note of what others are doing in the industry. Innovative benefits aren’t only reserved for top companies. Many partners, such as Cigna, are working on new offerings like wellness credits. If you’re facing resistance from executives about the financial impact of new benefits, there are also case studies out there that show the positive financial impact of new benefits. The shift in how these benefits impact employees, from advice-driven offerings to actionable programs, apps, and initiatives, will be the differentiating factor between lackluster and blockbuster benefits packages. 

Recommended Resources

• Employee Benefits In 2024: The Ultimate Guide
• New financial wellness benefits that can move the needle, keep workers from switching jobs
• Why Employers Are Rethinking Workplace Financial Wellness

Rick Anderson is the Chief People Officer and COO at SupportPay.