Four Best Practices to Improve Employee Financial Wellness

March 20, 2018

Financial wellness is one of the leading causes of stress in the United States, and not just for the unemployed. PwC has found that workers, even those with full time and good-paying jobs, are suffering under the burden of large debt, current expenditures, and expectations for future needs.

Prudential’s report “The State of Financial Wellness in America” highlights the reasons that American workers experience financial stress. That report surveyed 4,362 full-time employed adults with health insurance, and its findings were sombering:

  • 67% are stressed about saving for their future
  • 57% are stressed about their current financial situation
  • 25% spend more than they make each month
  • 65% have an emergency fund that covers less than 6 months expenses.

Due to the nature of the respondents (full-time health insured employees), these numbers trend a bit lower than similar surveys and quantitative evidence, like that analyzed on a regular basis by the JPMorgan Chase Institute or annually by PwC. The trends, however, solidify what we are already seeing—that regardless of income or education level, financial stress is one of the top issues plaguing American workers.

That’s why for America Saves Week and Military Saves Week, Prudential highlighted these concerns, and encouraged that employers take the financial wellness of their employees seriously. By leveraging their report, the Power of the Wellness Effect, Prudential offered four best practices that employers should use when establishing initiatives to improve financial wellness:

  • Leverage employee data analysis and insights to tailor financial wellness benefits to meet the unique financial needs of employees and make best use of their benefits.
  • Empower employees by providing financial education that can motivate employees to take advantage of their benefits and give them confidence to make the right decisions.
  • Maximize employee engagement by communicating financial wellness programs through multiple channels and tailoring the messages to appeal to segments of employees at different life stages.
  • Provide the right tools that address the foundations of financial wellness—day-to-day money management, saving for the future, and protecting against key financial risks.

Financial Wellness programs are important for all employers. The Chamber Foundation Corporate Citizenship Center’s (CCC) extern and running back for the Los Angeles Rams, Lenard Tillery, wrote a blog about his experience in the NFL, where players are given extensive financial wellness training in budgeting, credit, savings, and investment. Although as professional athletes NFL players are compensated well, they actually have even higher rates of financial stress compared to the general public. Pablo Torres in Sports Illustrated reported that 78% of former NFL players experience bankruptcy or financial stress within 2 years of leaving the league. The NFL and NFL Players Association implemented many of the financial wellness programs as a response to this high level of stress.

Like the NFL, the armed services are a unique employer as well. Instead of working with 2,000 professional athletes with relatively short careers, the military works with just under 1.5 million servicemen and women with careers as short as a single deployment to 30 years or more. Not only are the financial wellness needs of soldiers more varied, the ways that the military impacts their lives are numerous as well. From housing and education subsidies to tax repercussions, health, and retirement, the U.S. military has a much deeper connection to its “employees” than many companies, so has more potential routes to encounter the financial stress of America’s servicemen and women.

On Jan. 1, 2018, the military shifted from offering a traditional pension plan to the Blended Retirement System, which combines a defined benefit with a defined contribution plan. As a result, future generations of servicemembers will have greater responsibility for planning their own financial futures, especially as they prepare to transition out of the military.

In 2017, Prudential piloted a financial wellness program with the United Service Organization’s (USO) Pathfinder Program, which is dedicated to helping servicemembers and their families chart the path from military service to thriving veteran status. Prudential participates in the USO Pathfinder program by providing free financial education, through a digital platform as well as in-person seminars, that focus on financial readiness and are tailored to the unique needs and challenges that transitioning servicemembers and their families face.

“Transitioning from active duty to civilian life is not just about finding a job, it’s about managing that new income to support long-term success,” said Kylee Durant, vice president, Transition Technology & Innovation Programs at the USO. “Our partnership with Prudential to deliver financial education to transitioning servicemembers is a realization of that need. Our shared commitment to addressing the holistic needs of military servicemembers coupled with Prudential’s expertise in solving financial challenges are the key ingredients for a successful partnership.”

Whether in the NFL, the U.S. military, or a more common workplace, employees often have questions, concerns, and needs when it comes to their financial wellness. The workplace is often the best place to secure that help, primarily because it is a trusted source, an efficient way to distribute both education and initiatives, and for larger companies, better economies of scale. CCC will continue to work with its supporters to make it easier for all companies to be a resource for their employees to improve their financial wellness.