EL SEGUNDO, Calif.-Credit unions that offer financial wellness programs to help their employees combat financial stress can boost their bottom lines in multiple ways.
Liz Davidson, founder and CEO of Financial Finesse, a provider of workplace financial wellness programs, said during a webinar that financial wellness is important to employers because financial stress can cause several problems for employees. Financial stress manifests as headaches/migraines, insomnia, depression, high blood pressure and even heart attacks.
According to Davidson, benefits of an effective financial wellness program include reduced health care costs, increased productivity and performance, reduced absenteeism, increased satisfaction with benefits, and successfully managing benefit changes.
"Financial Finesse has found a strong correlation between financial education and reduced health care claims," she said. "Financial education rewards employees and employers."
After 30 days of a financial wellness program, the company's research found more than 90% of participants have taken at least one step to improve their finances, and 78% have taken two or more steps. Examples include reducing credit card debt, starting a savings account, or setting up or increasing contributions to a retirement account.
"Heavy users of financial wellness programs have significantly higher 401(k) deferral rates," Davidson observed.
Make Plan Relevant To Employees
Financial Finesse recommends the following learning methodology for setting up a financial wellness program:
Step No. 1 is to gain employees' commitment to make a financial decision or financial change. Davidson said this means very powerfully articulating "What is in it for me?"
"Show them how it will change their lives if they solve their financial problems and achieve their financial goals," she said. "Also show them what will happen if they do not make changes. It all starts with behavioral change-employees need to see the "win" in it for them.
Best Practices in designing the program include:
* First evaluating culture, work environment and demographics.
* Deciding whether all employees get the same program.
* Knowing which channels work best to educate the workforce.
* Using online assesments and tools for the initial introduction to program.
* Using on-site workshops-best for baby boomers.
* Using webcasts for Gen X and millenials.
* Using the phone for a remote work force.
* Using in-person counseling sessions-pre-retirees needing individualized guidance.
"If the company positions the program as a financial wellness benefit and connects it with existing physical benefit program it will maximize usage and connection," Davidson advised.
4 Elements of Administration
Administration of a financial wellness program includes four elements:
* Logistics: know all the pieces of the program and if the CU will be coordinating with multiple vendors.
* Tracking marketing and incentive success: know the incentives and marketing materials to which employees are responding.
* Measuring employee usage: have a plan in place to track components of the program being used and whether employees are returning for multiple services.
* Tracking behavioral change: track how the program is improving the financial wellness of employees.
"Another important element is incorporating financial wellness with an existing retirement plan," she said.