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TOTAL BENEFITS | WELLNESS
programs' effectiveness, and participants'
financial security. " They're
looking at defined contribution [DC]
withdrawals, loans, reduced retirement
savings contributions, etc. " They also
note what employees say in virtual focus
groups or surveys about how their financial
lives have evolved, he says. Sponsors
then use this information to fine-tune
their wellness offerings.
To study their programs, employers
will have to read data at an employee level,
Smrecek adds. Some have set up measurement
strategies that interpret the participants'
behavior as a means to assess a
program's success. Moreover, studying
employee metrics unearths problems
that need to be dealt with-problems the
correct program can address, which ultimately
can lead to behavioral change, he
observes. " We're starting to see employers
take a look at these [return on investment]
items to see whether, over time,
they're having the intended business
impact more broadly within their organization, "
he says.
Other experts suggest that employers
step back and focus on the basics-and
not overanalyze data. Snezana Zlatar,
senior managing director of financial
wellness advice and innovation at TIAA
in New York City, says no single metric
or benefit offering will safeguard an
individual's financial security.
Instead, employers should regularly
monitor what she called " the core
pillars of financial wellness " -e.g., financial
literacy, debt and personal finance
management, and saving appropriately
for retirement-which, together, benefit
participants holistically. Sponsors should
consider these when selecting solutions
and programs-including education, tools
and advice-that best suit their specific
employee demographics, Zlatar says.
" A good example would be that, if an
assessment shows a segment of employees
struggling with student loan debt, implementing
a solution that helps [there] would
be the next logical step, " she says.
Measuring the effectiveness of their
How Employers Intend to Measure Financial
Well-Being Program Success This Year
Employee use of benefits
Retirement plan stats
Employee engagement
Medical costs
Absenteeism
Do not intend to measure
82%
55%
52%
12%
5%
6%
Source: Alight, " 2021 Hot Topics in Retirement and Financial Wellbeing "
programs can lead sponsors to improve
their offerings, such as adding financial
advice, says Cindy Dash, a general
manager at Matrix Solutions, a Broadridge
company, in Denver.
This can be especially beneficial for
younger workers, who favor personalized
solutions. The Broadridge study found that
76% of Gen Zers and 62% of Millennials
say having a financial adviser is worth the
cost-and over the long term, too. These
groups expect to have an adviser at their
disposal over the span of their careers,
not just for the next year or two, says
Dash. Now more than ever, employees are
searching for financial advice and the tools
they need to utilize such advice, she says.
Creating a Baseline
In a Retirement Advisor Council
" Viewpoint " article, " A Return on
Wellness: Measuring Financial Wellness
Programs, " the council notes that employee
surveys and internal information gathered
prior to the launch of a financial wellness
program establish a baseline from which
to measure success.
Some goals such as improving
retirement readiness are relatively easy
to measure, Cerulli Associates says in a
2019 report. However, others goals, such
as improving financial literacy, increasing
workplace productivity and decreasing
employee stress can be less determinate.
While improvement in employee situations
and actions is one part of measuring
the success of a financial wellness program,
employers can also assess the program's
effect on the company, in terms of how
much, by attacking financial stress, it has
lessened costs. The sixth annual edition of
John Hancock's Financial Stress Survey
shows that more than half of employees
worry at least once a week about personal
finances while on the job, causing workplace
distraction and a loss of productivity.
This loss of productivity, plus absenteeism
due to financial stress, has a major impact
on organizations, John Hancock says.
In dollar terms, absenteeism and
lower productivity tied to financial
stress cost more than an estimated
$1,900 per year, per employee, and total
an estimated annual loss of $1 million
for midsize employers and $19 million
for large employers, according to John
Hancock's findings.
" We're in a new world order, " says
Dash. " It's clear that financial wellness
programs are more important than ever,
coming out of the pandemic. It's also not
just about the programs being offered,
but the benefits that employees embrace. "
-Amanda Umpierrez
PLANSPONSOR.COM April - May 2021 37
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