Financial wellness in the workplace

1. Context
2. The study
3. Key findings
4. Points to consider

Context

This paper presents results of an online employee benefit survey completed by 408 U.S companies or organisations with more than 1,000 employees in January 2015.

More generally the paper is aiming to encourage companies to initiate financial wellness (or education) programmes and presents information on the incidence of financial stress, the benefits of a financial wellness programme and information from Alliant’s employee wellness assessment survey conducted in 2014. Information on components of a financial wellness programme are presented, together with best practice in developing and implementing, barriers to implementation and guidance on selecting a financial wellness partner.

The paper states that financial stress has a significant impact on both the physical well-being of employees and their workplace productivity and so financial wellness programmes have benefits for the company as well as employees. Since 2008, nearly 60 per cent of American employers have implemented a health and fitness wellness programme (source: Benefitnews.com).

The study

The paper presents survey data on the attributes and benefits of financial wellness programmes in U.S companies or organisations. Financial wellness programmes aim to promote financial well-being and may also focus on financial capability (or mindset) but the paper did not focus on these outcomes.

Alliant invited a national sample of senior HR decision makers to complete an on-line survey and 408 responded. Alliant was not identified as the surveyor. A financial wellness benefit programme was defined as one designed to promote the employees’ financial well-being. There is no information on the response rate or the representativeness of respondents. Quantitative data is presented from the survey together with qualitative information on best practice and quotes from individual companies to illustrate points.

The paper also presents data from Alliant’s financial wellness assessment survey of 1,007 employees between the ages of 18 to 64 in September 2014, as well as contextual data from secondary sources although full references are not given.

Key findings

Financial capability (Ability):

• 40 per cent of respondents offer a financial wellness programme, according to the survey definition (a programme designed to promote employees’ financial well-being).
• 11 components were listed as comprising a robust programme - only 11 per cent of respondents answered that their company’s financial wellness programme contained all components. About two-thirds (65 per cent) offered retirement planning and just over half (52 per cent) offered medical/health care cost planning programmes.
• Respondents stated the following benefits to the company: - 43 per cent increased employee engagement/morale - 40 per cent improved productivity - 40 per cent provided education for employees’ goals - 36 per cent helped alleviate employees’ financial stress - 23 per cent helped reduce employee absenteeism
• 49 per cent of HR managers surveyed indicated that cost is the main barrier in introducing programmes, with the anticipated time commitment needed to launch or manage the programme the second most cited barrier.
• The 2014 employee survey found that: - 40 per cent need to improve retirement planning - 25 per cent need to improve savings - 11 per cent need to improve debt management - Eight per cent need to improve how they handle their credit - Six per cent need help to improve overall financial planning

No information was presented on confidence intervals, statistical significance, etc.

Points to consider

• Relevance: the requirement for employers to provide a pension scheme is relatively recent in the UK and as a result there may be an increasing interest in the provision of financial education in the workplace.
• Generalisability/transferability: there are differences in the financial context (e.g. health insurance) and employer/employee relationship and expectations between the US and UK which may limit transferability.
• Methodological limitations: the survey results presented are not qualified, with no information on response rate, representativeness of respondents and confidence limits or statistical significance.
• Applicability: the paper aims to both present survey results and provide support for the introduction of financial education programmes, with the underlying message being that financial wellness can improve a corporation’s ‘bottom line’. As a result there may be an inherent bias with the publication which is more akin to market research, but it still provides useful insight.

Full report

Financial wellness in the workplace - full report