The number of financial wellness programs offered by employers is skyrocketing, as workers clamor for help in increasing financial literacy and improving their financial wellness.
The percentage of employers offering financial wellness programs rose to 83%, up from 20% two years earlier, according to Prudential’s 10th Benefits and Beyond: Employer Perspectives on Financial Wellness study. And an additional 14% of employers say they plan to offer these programs in the next one or two years.
On average, employers offer seven programs, and plan to offer another four within the next two years, Prudential notes. The most common programs include tools and calculators to help workers gauge their financial wellness, retiree planning (e.g. Social Security optimization) and access to financial advice/advisors.
“Our survey reveals that employers and employees report higher satisfaction with their benefit plans when financial wellness programs are offered,” said Vishal Jain, financial wellness officer for Prudential’s workplace solutions group. “Employees increasingly look to their employers to help them achieve financial security, and employers are seeking data and insights on how to respond and influence better outcomes.” But are these programs working for employees and are employers getting their ROI?
Employers are keen on measuring the impact of their financial wellness programs frequently — 49% measure quarterly, 20% monthly — and data analysis is essential. Employers measure success in a number of ways, with employee satisfaction as the most commonly used, the study noted. Several methods are deployed to determine employees’ needs and gauge the success of programs, such as employee surveys, internal data on 401(k) loans or hardship withdrawals, and advice from providers and carriers.
Large companies rely more on hard data such as tool usage — and say that more data from their financial wellness providers would help their program gain traction, according to the study, while small companies rely slightly more on anecdotal data and advice. “Employers recognize the best way to support employees is to understand their needs,” Jain said.
Criteria for selecting financial wellness partners are primarily driven by cost, ease of implementation and expertise, according to the survey results. In addition, large employers want involvement in implementation and ongoing support, while small- and medium-size employers also want a good fit of programs to employees’ needs, as well as a return on their investment. Overall, retirement plan and benefit providers are the preferred providers for financial wellness. “As financial wellness becomes the rule rather than the exception, financial services providers that can use data to help employers develop better programs and communications for employees will be increasingly valued,” Jain added.