Employers Rapidly Embracing Financial Wellness Programs to Help Employees Solve Money Problems
March 9, 2020
Number of employers promoting financial wellness expected to nearly double as 90% express concern for employees’ financial troubles
SPRINGFIELD, Mass.–(BUSINESS WIRE)– As concern about workers’ personal finances grows, the number of employers that offer financial wellness programs through the workplace is expected to nearly double within the next few years, according to research from Massachusetts Mutual Life Insurance Company (MassMutual®).
The MassMutual Financial Wellness Trend Study1 finds that 42% of employers currently offer financial wellness programs. Another 19% of employers are in the process of implementing programs and 19 percent say they plan to introduce wellness programs within the next three years, the study finds.
“Financial wellness has become a huge priority for employers across the country as Americans struggle with managing a wide variety of financial issues from paying down credit card debt and handling emergency medical expenses to saving for retirement and planning for long-term care,” said Una Morabito, Head of Client Management for MassMutual. “In response to employers’ concerns, we now offer more tools, resources and solutions to help Americans better cope with their personal finances.”
The bigger the employer, the greater importance placed on financial wellness. Overall, 86% of employers characterize financial wellness programs as “important,” MassMutual’s study finds. Importance of wellness programs ranges from 72% of smaller employers (fewer than 25 workers) to 94% of larger firms (1,000 or more workers).
Employers have several motivations for offering financial wellness programs. The chief motivation, 90% of employers report, is they “really care about their employees.” Eight in 10 employers also said the opportunity to support employees at a minimal cost while being on the “cutting edge of benefit offerings” and gaining an advantage in hiring talent were also contributing factors, the study finds.
Holistic Solutions Preferred
When asked what an effective financial wellness program should comprise, 47% of employers said a program should address an employee’s full financial picture. Others pointed to combinations of retirement, insurance, education benefits and advice. Other popular components included credit/debt counseling, help with medical costs, and childcare and elder care.
MassMutual continues to introduce non-traditional workplace benefits to address a wide variety of financial wellness needs, including emergency savings, college tuition repayment and refinancing programs, Health Savings Accounts, critical illness and accident coverage, and others.
The Right Tools
While many employers point to the need for online financial planning tools as essential for an effective financial wellness program, many were dissatisfied with their current tools. Nearly two in 10 (18%) of employers said online tools were the least successful component of their program, according to the study. But the story does not end there.
Employers were also asked to react to a description of a holistic financial planning tool that would enable them to load information about their personal financial situation – including income, expenses, debt, retirement savings, and insurance — as well as their goals. The tool would then use the information to help employees prioritize their goals and provide simple, concrete steps to realize them. A majority of employers (58%) report wanting to offer the tool and characterize it as useful.
“The right tools and resources can make a huge difference in employees’ financial lives,” Morabito said. “MassMutual’s MapMyFinances tool was the basis for the description and won a strong endorsement from employers looking for a powerful, helpful tool for employees to start putting their financial house in order.”
Success at Work
Seventy-eight percent of those firms report that their financial wellness program is extremely or very successful, according to the study. Factors for determining success included employee feedback, participation in programs, employee metrics and retention.
The most popular components of a financial wellness program were retirement (90%), online retirement tools (86%) or financial planning tools (86%), protection products such as life, disability and medical insurance (82%) and access to a financial advisor for financial planning (77%) or retirement planning (76%), the study finds.
What do employers say is the most successful at helping employees with financial wellness? Forty-three percent point to communications, including from human resources (26%) or upper management (17%), the study finds. A third (32%) say financial rewards, including discounts, cash awards and free credit reports, drive participation.
“Financial wellness need not be expensive for either employers or employees,” Morabito explains. “Working with the right provider, effective tools and education, and a mix of voluntary benefits designed to meet a wide variety of needs can make all the difference.”
MassMutual’s online study surveyed a total of 863 employers that sponsor retirement savings plans with assets of between $1 million and $75 million. All respondents have some decision-making responsibility for either their retirement plan or financial wellness program.
Source: Massachusetts Mutual Life Insurance Company