Tina is an HR director for a large company, and as the new year starts, she’s reviewing the results from her company’s annual employee survey. As she’s reviewing the responses, she’s surprised to see how much stress and confusion finances cause among employees. She doesn’t understand — the company provides many financial wellness benefits to help employees better understand and manage their money. Why isn’t anyone using them?
Just as Tina’s employees are confused about finances, they’re also confused about their financial benefits. In fact, a 2015 survey from MetLife found that many employees don’t understand the basics of their benefits, especially financial benefits. And employees won’t benefit from these offerings if they don’t know they exist and don’t know what they are.
Here’s a look at some of the least understood financial benefits and how to make them more clear to better support financial wellness:
Retirement seems like a long way off for most employees, and planning for it now can be stressful. In fact, 60 percent of employees surveyed by the International Foundation of Employee Benefit Plans (IFEBP) said they have trouble saving for retirement. For most employees, it’s easier to put retirement planning on the back burner and worry about it later.
So it’s no surprise that defined benefit pension plans were the least understood benefit in the MetLife survey. A full 42 percent don’t understand this benefit. Start clearing up the confusion by educating employees on the differences between defined benefit pension plans and defined contribution plans.
Focus on how these plans will impact their financial wellness now. Show how much money they will contribute, how much money the employer contributes, and how much money they can save by starting early. Be sure to emphasize how something that seems so far away is actually real and important now. By conducting one-on-one meetings, you can better answer employee questions, fully explain your retirement financial benefits, and help each individual prepare for their future.
Financial education and workshops
Financial planning and education workshops are one of the most common financial wellness benefits employers offer, but they’re one of the least understood. In the MetLife survey, 36 percent of employees said they didn’t understand this benefit.
That’s because when you hear workshop, it sounds boring. Sitting in a room with co-workers while someone talks about finances doesn’t sound like fun, and, more importantly, it doesn’t sound like it will help an employee with their unique financial concerns.
Show employees that financial planning is more than boring seminars and get them excited about new programs. First, explain exactly what these programs entail and how they can help. Share success stories and have employees who have used these programs discuss how they helped.
Then, make it easy for employees to participate by offering both in-person and online programs. After all, the IFEBP survey found that voluntary classes, workshops, and web-based resources and courses are the most effective methods of providing financial education.
Remind everyone that these services are available with emails, updates on internal social networks, in-person meetings, and through e-vites for employees to download financial apps and tools.
Managing finances isn’t always easy, and everyone could use a little help to be smarter with their money and achieve financial wellness. In fact, the IFEBP report found that nearly half of organizations rate their workforce as only a little bit or not at all financially savvy.
Employees need help, but they don’t always want it. As soon as the word “counseling” is mentioned, people tend to freeze up. They hide their problems, claim they’re fine, and do just about everything including bolt from the room. That’s because counseling has such a stigma, employees will do anything to avoid it. Counseling and employee assistance programs are only for those with serious problems, not me.
Unfortunately, this attitude prevents many employees from getting the support they need. Help them understand that counseling isn’t anything to be ashamed about and that the service is there to be used. If it helps, reframe the benefit as financial coaching. Set up private coaches to help your team set goals, understand their spending habits, and keep them accountable.
Financial wellness is an important part of overall employee well-being. But if employees don’t understand the services you offer, they’ll never use them. Help employees help themselves with better benefits communications, especially around financial wellness.
How do you support financial wellness in your organization? Share in the comments!
Mark Malis is the Head of Global Human Resources LifeWorks, an EAP that takes a holistic approach to employee assistance and wellbeing with a robust offering of perks, recognition, rewards, and a communication platform. Follow LifeWorks on Twitter, Facebook, and LinkedIn.