Most Financial Wellness Programs Don't Work. Here's How to Fix Them
Today's modern developed economies share one, unenviable trait: they all feature workforces that are financially illiterate. In the US, almost two-thirds of the population is unable to pass a basic financial literacy exam, while in the UK, one in three can't correctly count their change when they go shopping. On the surface, that may seem like a societal problem that is unrelated to business interests, but nothing could be further from the truth.

In reality, financially illiterate or unstable employees often suffer from anxiety and decreased workplace performance, and in extreme cases, are more likely commit fraud due to financial strains. That means that businesses everywhere have to do what they can to provide financial education and support to employees if they want to encourage productivity and insulate themselves from risk. To do that, many have turned to financial wellness programs that seek to offer counseling and advice to help employees maintain economic stability. Unfortunately, they may not be working as intended. Here's why, and what can be done to remedy the situation.
A Growing Disconnect
Although financial wellness programs are becoming a more common feature of business' benefit packages, they haven't seen widespread use by rank-and-file employees. Part of that seems due to a natural reticence by employees to disclose financial data to an employer-connected program, for fear that it may place them in a negative light. The other major problem, though, is that employees are asking for the kind of one-on-one attention that most employer-sponsored programs lack. They also tend to want a step-by-step approach to handling their finances, while many financial wellness programs focus instead on broad overviews and end results.
Poor Participation Rates
The disconnect between what financial services that employees want and what businesses are making available to them have added up to low rates of participation for businesses that have started offering financial wellness programs. According to one recent study, only 31% of employees currently take advantage of available financial wellness programs, even though a full 86% say they would participate if such a program was offered. That means that rather than focusing on expanding access to financial wellness programs, businesses need to reevaluate their existing offerings to better align them with employee demand. That's the surest way to increase participation and solve the problem of increasing financial literacy overall.
Bundles of Individualized Services
The best way for employers to bring their financial wellness programs into line with employee expectations is to focus on providing information, as well as access to individualized support. For example, creating and maintaining a self-service repository of financial tools and information is an excellent place to start. The effort should include the widest variety of helpful resources, from planning tools like a credit card payoff calculator, to real-time data like common mortgage refinance rates and investment research materials. That will create a solid knowledge base for employees to use at their own discretion, and give them a frame of reference that they can cite if they choose to take advantage of one-on-one financial advisors as part of the wellness program.
Incentivize Active Participation
Once the correct program is in place, it's a good idea to take steps to create incentives for participation. For example, offering bonus vacation time for employees that meet financial goals provides a reward for those that follow through with their financial action plans. That will help to create a self-sustaining system that increases participation in financial wellness programs while providing additional value to employees that thrive in them. For employers, this helps to improve employees' financial literacy and stability while engendering positive feelings within the labor force. It's a win-win that often pays for itself in increased productivity, lowered risk, and enhanced employee loyalty. So for businesses that already offer financial wellness benefits, kudos to you – but if you do it right, you'll receive plaudits from your employees instead, and reap the rewards of a financially literate workforce.