Discussion Guide
Every company has to balance its aspirations for employee benefits with practical, financial realities. Use this guide to begin exploring the ways in which focusing on financial wellness can benefit your organization from both a benefits perspective and a cost-focused perspective. For the best results, review this guide with a financial advisor—using it as a starting point for a deeper exploration of your company’s financial wellness needs.
Benefits Philosophy
1. What role does your benefits plan play in attracting and retaining top talent?
2. What factors drive your general benefits goals (e.g., health plans, retirement plans, etc.) with respect to:
- Managing costs
- Features and benefits
- Comparison with peers
3. Do employees seem motivated by benefits enhancements?
4. Do your benefits offerings provide a value to your company that seems appropriate given the expense and other resources devoted to maintaining them?
Your Workforce
1. Does one age group dominate your workforce? What will the age range of your company look like 15 years from now? How will that impact expenses?
2. Do you have a disproportionately high number of workers with college debt? Do you notice any difference in productivity or turnover with this group?
3. Do employees ever request salary advances?
4. Have employees ever discussed “big ticket” purchases or expenses at work? Have they ever indicated financial hardship? Have they ever shown an awareness or use of fundamental financial skills like paying down debt or budgeting?
Retirement Plan Data
1. Are employees retiring on time with adequate savings? All told, how much is the company spending on employees age 65 and older?
2. Do participants opt out of auto-enrollment at an aboveaverage rate (average rate = 6.8%2)? If yes, what might be the reasons for doing so?
3. Do you notice a high amount of calls and Web traffic regarding aspects of your plan like loans, in-service distributions, or hardship withdrawals?
4. Do participants take out loans from your plan at an above-average rate (average rate = 24%3)?
5. Are participants taking multiple loans from your plan at the same time (if available)?
Commitment
Financial wellness programs range widely in costs and features. Before you make a decision on a provider, consider how much you’re willing to commit to:
- The cost of the program
- Education and promotion
- The resources necessary to administer the program
Success can take time. In order to see the best results, are you willing to support the program over several years?
Benefits considerations
- The emotional toll that financial stress takes on employees can’t be overstated.
- Financial wellness not only makes employees more productive, it enhances their quality of life outside the workplace.
- Financially unhealthy employees may falsely believe that more money will solve their issues. This puts employers at risk of losing workers to competitors willing to pay just a few dollars more.
- Trends show that younger employees tend to change jobs every three to four years. Well-crafted benefits programs may address this issue.
- Financial wellness offerings can often be incorporated into existing education programs easily and with minimal additional effort on the part of employers.
Financial considerations
- How much is turnover costing the company?
- A financially healthy workforce has a better chance of retiring on time, which can translate to significantly lower payroll, health care, and workers’ compensation costs.
- Seventy percent of Human Resources professionals surveyed said financial problems impact employee performance.4
- Half of plan participants said they were absolutely certain or very likely to increase their 401(k) contributions if they had less debt.5 Thirty-one percent said they would save more for retirement if they had emergency savings.
- Each generation values benefit plans differently. Surveying your employee base at regular intervals may capture these changing opinions and help ensure that your benefits dollars are being spent effectively.
Based on your answers to the questions in this discussion guide, if you have decided that financial wellness education is something that you want to provide to your employees, we can help you find the program that’s right for you. Use our financial wellness program evaluator as a follow-up to this piece. It will give you a breakdown of the financial wellness provider landscape— showing you the strengths and weaknesses of each type of provider so that you can find the one that meets your unique needs and preferences.