Today’s workforce is far more dynamic than it was even 10 or 20 years ago. In decades gone by, the profile of an employee was fairly homogeneous –– generally the person was a male, married, who worked at the same company for his entire career then left with a substantial retirement package. These days, that has shifted dramatically, and thankfully, there is no longer a single archetype of employee. Instead, there is an ever-increasing gender balance in the workplace, with growing shifts in marital status, life goals and career trajectory. All of this has combined to create a far more diverse work environment, one that requires companies to think about employees at a more individual level than ever before.
Our recently published report, Cornering Workplace Financial Wellness: Designing employee programs that work, showed that within this context, one of the areas that presents the biggest opportunity is that of designing custom financial wellness programs. Previously, companies were able to offer standard packages that fit the traditional profile of an employee. But with changing demographics and demands, there is a growing requisite—and opportunity—to deliver more personalized offerings that reflect the individual.
Cornering workplace financial wellness
Our report shows that a company of 50,000 employees can save between $33 million and $49 million annually, simply by increasing the financial wellness score. On the other hand, employers who ignore the financial wellbeing of employees are at risk of suffering losses in performance and output.
Companies depend on their workforce, and a workforce that is stressed about finances is less productive. As shown in our research, employees report spending roughly 150 hours annually worrying about money—and while financial wellbeing may not intuitively be linked to business performance, there is certainly a connection.
The unfortunate reality is that most people are not to prepared to save, which can have serious implications. In an article published on Prudential’s website, Phil Waldeck, Head of Prudential Workforce Solutions, identifies one of the problems: “People are just not saving enough.” He adds that “the stakes for employers and their employees are getting higher because the financial challenges Americans face are increasing in scale and complexity.”
That same article outlines how Chubb, a global insurance company with more than 18,000 employees, recognized that financial stress was having a negative impact on productivity. Chubb worked with Prudential to launch a financial wellness center and offered self-assessments for employees, surveys and other tools. Through this it learned that 77% of employees were either somewhat stressed or very stressed about saving for the future, credit card debt or monthly bills. Additionally, about 14% had less than a month of savings to safeguard themselves in case of the loss of work, and 29% were not confident about their retirement prospects.
In response, Chubb offered its employees Prudential Pathways, a program designed to help provide financial wellness and get people on track using strategies such as budgeting, debt management and retirement planning. The result was positive, with 37% of employees planning to create or stick to a budget.
MetLife offers a similar program called PlanSmart.
Wealth managers, insurance companies, fintechs, and other financial firms should look to the success of programs like Prudential Pathways and be proactive in their approach to offering financial wellness packages that meet the needs of employees as well as the organization.
In the second part of this blog series, I’ll explore some of the driving factors that inspire employees to embrace financial wellness programs, as well as approaches for designing more customized offerings that employees want. In meantime, if you’d like to take a closer look at Accenture’s Cornering Workplace Financial Wellness report, you can find it here.