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Guest view: Before splurging on gifts, gauge employee financial wellness

By , - Last modified: November 17, 2017 at 7:49 AM
Tara Mashack-Behney, president of Conrad Siegel Investment Advisors Inc.
Tara Mashack-Behney, president of Conrad Siegel Investment Advisors Inc. - (Photo / )

Are your employees fiscally fit?

While you might recognize when an employee feels physically unwell, financial wellness can be much more difficult to comprehend. Many employers don’t realize how financially “unwell” employees today are.

Financial wellness is a balance between living comfortably today and preparing wisely for the future. Employees should be able to meet day-to-day expenses, handle financial emergencies and be on track to reach long-term financial goals.

However, 33 percent of employees have difficulty meeting household expenses and 51 percent don’t have enough emergency savings to cover unexpected expenses. The upcoming holiday season puts additional financial stress on employees. Holiday gifts are often an overlooked expense that can cause even the most disciplined employee’s budget to go out the window.

So, how does this impact employers? Because money is a top source of stress, more employees are missing time at work to handle financial affairs. Studies have shown that 46 percent of employees spend over three hours a week dealing with financial matters on the job.

And while most employers think financial matters are employees’ own concern and want to be left alone, a majority is looking for at least a slight nudge from employers to save.

Employers should not be hesitant to step up and help out. The holiday season is a great time to educate participants about true financial wellness so that they do not tap into their retirement savings to cover the cost of holiday gifts.

To design a successful financial wellness program, employers should ask themselves the following questions:

1. What will be the foundations of the company’s program?

Financial wellness programs should take a holistic approach to finances. This can include budgeting, debt management, college savings, retirement savings, investing, risk mitigation and drawing down money in retirement.

Assess employee needs to develop a tailored program that will address their most prominent concerns. There is no one-size-fits-all approach. You may have employees struggling with credit card debt, trying to figure out how to cover the cost of a child’s college education or concerned about running out of money in retirement.

2. How will the company implement the program?

Financial preparedness messages can be shared through newsletters, videos, live webinars and targeted mailings. To grab the attention of employees, the messaging should be simple and actionable.

As you think about what the program will include, take steps to ensure the messages will reach all employees. If you have a diverse workforce where English is a second language for some, consider creating communications in both English and Spanish. If all employees do not have immediate access to a computer, you may need to share printed mailers or hold in-person meetings to communicate.

3. How will the company measure its success?

Unfortunately, you can’t just look at retirement plan statistics to know if the program is making a difference. Plan statistics only look at one aspect of employees’ financial health. For more complete insight into employees’ attitudes toward their overall financial security, survey them regularly to monitor changes in well-being over time.

4. How much will it cost?

The total cost will depend on the type of messaging and the number of segmented groups that you target. Printed materials will cost more than email, but may be necessary to reach certain employees.

If you implement automatic features in your retirement plan to help employees save, there is a good chance matching costs will go up since more employees are likely to be in the plan and increase their savings over time.

Also factor in the savings you may achieve from having employees focused at work, rather than worried about their finances.

5. How much time will it take?

Employees will not achieve financial wellness overnight. It is a process that will require multiple points of contact before gaining attention. As an employer, you should monitor the results and repeat the messaging with adjustments to truly impact employees’ financial well-being.

Tara Mashack-Behney is president of Conrad Siegel Investment Advisors Inc. in Susquehanna Township, Dauphin County, chair of the firm’s investment committee and a member of Conrad Siegel Actuaries’ business development committee. She works with private sector employers, tax-exempt organizations, large associations, and foundations.

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