Companies With Multi-Year Programs Show Substantially Bigger Employee Gains
Companies who have had comprehensive financial wellness programs in place since 2015 are seeing a substantially bigger increase in the financial health of employees who repeatedly use the benefit, according to Financial Finesse’s Financial Wellness Think Tank 2017 Year in Review research. Employees who repeatedly engage with financial wellness programs offered by their employer are benefiting from a compounding effect, where gains in financial health grow over time.
“We’re seeing solid evidence that a long-term program which engages employees in multiple ways, including online, in workshops, over the phone, and in person, works as predicted,” says Liz Davidson, the CEO who founded the nation’s first financial wellness firm in 1999.
Researchers found that for companies with multi-channel programs in place for three years or more:
The average Financial Wellness Score™ of repeat users improved 22 percent from their first assessment (5.0 out of 10) to their last assessment (6.1 out of 10). Using Financial Finesse’s ROI model, researchers predict this would result in an average gain to a 10,000-employee company of more than $500,000 per year from reduced absenteeism, wage garnishments, and increased tax savings from contributions to HSAs and FSAs. This estimate does not include additional gains that could result from reduced turnover, financial stress, and costs of delayed retirement.
Repeat users are twice as likely to be on track for retirement. Forty-three percent of repeat users are on track for retirement, compared to just 19 percent of employees who are engaging in the financial wellness benefit for the first time. Improvements in retirement preparedness are critical to both employers and employees because of the costs that delayed retirement presents. According to research conducted by Prudential, the average cost of delayed retirement averages over $50,000 per employee per year.
Repeat users are nearly half as likely to suffer from unmanageable financial stress. About one in seven repeat users (14 percent) report high or overwhelming levels of financial stress, compared to one in four (27 percent) new users. Reducing financial stress from debt reduces employee health care costs by lowering the frequency of chronic health problems like diabetes and heart disease, based on survey research conducted by the Associated Press and AOL.
Repeat users are significantly more confident investors. Sixty percent of repeat users are confident their assets are allocated correctly, compared to just 39 percent of new users.
Employees keep coming back. Repeat users have increased from 33 percent of total financial wellness benefit users in 2016 to 58 percent in 2017.
“Early adopters of comprehensive workplace financial wellness programs, which include unbiased financial coaching, have proven successful,” noted Think Tank Director Greg Ward, CFP®. “From our experience, trying to address employee financial wellness with a technology-only approach has had limited success, which may have contributed to the recent shutdown of several financial technology companies.”
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The Financial Finesse report outlines employer best practices to encourage repeat usage of financial wellness benefits by employees in order to affect financial behavioral change and generate employer ROI on a broad scale. Financial Finesse is holding a live stream event to discuss these findings and implications on employers, employees and the future of the financial services industry on Thursday, May 31st at 10 am PT. Click HERE to register.
Financial Finesse is the largest independent provider of unbiased workplace financial wellness programs in the country, delivering holistic financial coaching and guidance that helps employees improve their financial wellness. The firm’s programs cover every area of financial planning – from basic money management to advanced estate planning – and cost employees nothing out of pocket, since they are fully paid for by their employers. Financial Finesse’s programs are proven to change lives, provided through a variety of channels such as mobile financial coaching, live events, interactive webcasts, one-on-one financial counseling sessions and a financial helpline staffed by Certified Financial Planner™ professionals who do not sell any financial products or manage assets. www.financialfinesse.com.
Download the report: https://ffinesse.box.com/v/FWTrends2017YrInReviewReport