As it becomes harder to attract, retain, and develop talent, many organizations attempt to design and implement enticing well-being programs.  Business leaders are now ranking financial wellness as the #1 priority.

This is not a new problem.  In four short years—from 2015-2019—the number of companies offering financial wellness programs more than doubled.

Despite the massive adoption of these programs, more people are struggling with money stress than every before—73% of Americans identify financial issues as their dominant source of stress.  Even with more benefits aimed at addressing this issue, the problem is getting worse.

According to the people implementing these programs, there are three huge reasons for this:

  1. Participation – Not enough employees are using the resources.

The most common response from HR when asked why their programs fail is the simplest explanation: people do not use them.  Even though 77% of workers[1] say a financial wellness program is important, getting employees to engage with the offerings—as with many well-being initiatives—is a struggle.  If this is what people want and need, why do they not participate?

  1. Value – The programs fail to deliver what employees need most.

When asked about the greatest barriers to success for their well-being programs, the second most common reason is the failure of the organization to provide the resources and commitment necessary to create success.  That is a nice way of saying that the budget is not there.  The result is that many financial wellness programs have little or no cost associated with them, and about the same value.

Basically, there are two types of offerings: educational and product.  While financial literacy is a huge issue, education is not an outcome.  Most people know why they are struggling to make ends meet.  They do not want a virtual class on budgeting, they need solutions.  There are some great educational offerings with helpful information, but even the best of them do not convert that knowledge into results.  And sometimes education can even be discouraging—many people realize how far they are from their goals and just how bad their situation is.

Products like earned wage access, financial aggregation software, and employee banking are often free or low-cost to employers because the employees are the source of revenue.  These resources can be essential to disrupting negative financial cycles, but employees either do not have the cognitive bandwidth to understand how to extract their potential or they become temporary band-aids that get used on an as-needed basis instead of being part of a long-term strategy for financial wellness.  The transactional nature of product offerings the cost the employee incurs—either in dollars or in time—disincentivizes usage.

  1. Integration – The programs are not part of a clear, consumable strategy.

Financial wellness is a huge problem.  The reality is that employers need to offer education, resources, products, and other benefits to help tackle this challenge.  But that presents another problem: employees do not understand how to use these programs as part of a strategy to address their personal circumstances.  Many do not even understand their core health benefits, and a suite of financial solutions is both intimidating and confusing.  With just 15% of Americans[2] confident in their ability to manage their money, adding complexity can feel more like a burden than a blessing.

All of these competing objectives are what makes effective implementation of well-being programs of all types so difficult.  But there are some commonsense solutions to help make a financial wellness initiative drive results for both the organization and its people.

The solution to participation may not sound attractive, but workers actually love it: make the program mandatory.  This means dedicating company time to the program so that employees have scheduled events at regular intervals.  Because this is the number one problem for most people and they are already spending time at work on personal financial issues, setting aside working hours can actually improve productivity.  Setting aside even half-an-hour each month can make a massive difference.

Value can be tougher to address.  There is a reason the phrase, “you get what you pay for,” is so often repeated.  Employers need to realize that—just like any other challenge their business faces—solving this issue means committing resources.  People are the largest line-item expense for most organizations and they require investment.  While the existing free and low-cost solutions have some value, employers need to implement programs that measure and verify outcomes to make sure their employees are getting what they need and the benefits are worth the cost for the business and the end user.

An integrated approach is necessary for success, and that means providing personalized guidance is essential to help people access the programs’ potential.  This means a human connection that can provide advice, education, task assistance, and accountability partnership.  There is tremendous value just waiting to be tapped in most total rewards programs, but employees do not know how to access it.  In addition to specific guidance on financial issues, helping each team member choose and use their benefits in the most impactful way for their personal circumstances can add ROI to every component of their compensation package.

These may sound like scary commitments.  But the cost of the status quo is much higher: employers are losing over half-a-trillion dollars each year in productivity and turnover costs to financial stress.  There are more losses in health, culture, and safety.  It is past time to rethink how we empower people to access financial progress and provide programs that can help convert total rewards into individual outcomes.

[1] John Hancock 2019 Financial Stress Survey (pdf available upon request)

[2] SHRM/Money Network: Financial Literacy and the American Worker (pdf available upon request)