The Benefits of Workplace Financial Wellness Programs
How Companies Can Promote Household Financial Security
Mathieu Despard, University of Michigan
Meredith Covington, Ellen Frank-Miller, Geraldine Hannon, Michal Grinstein-Weiss, Washington University in St. Louis
PlanSource Eclipse 2017 • July 21, 2017 • Park City, Utah
What is Financial
Wellness?
“Freedom from financial stress and debt, enjoying life, and being prepared for emergencies” 1
Employee Financial Wellness
2017 PwC Employee Financial Wellness Survey
• 53% of employees have financial stress - #1 source of stress
• Nearly 1 in 3: personal finances a work distraction; 22% say productivity suffers
• 42% struggle to meet monthly household expenses
Employee Financial Wellness
2017 PwC Employee Financial Wellness Survey
• 35% use credit cards for basic needs
• 30% have made non-retirement withdrawals from plans
• Top concern: lack of emergency savings (50%)
Source: JP Morgan Chase Institute
Source: JP Morgan Chase Institute
What Employers Can
Do
Financial Wellness Programs – services to help employees become more financially capable and secure
• Financial coaching
• Credit counseling
• Online financial management tools
• Payroll advance or short-term loans
• Split deposit, automated savings products
Financial Wellness Programs
Research supported by the Ford Foundation, the JPMorgan Chase Foundation, and the W.K. Kellogg Foundation
Table 3. Services Offered (n = 60)
%Direct deposit 83Split deposit 71Financial coaching
In person 56Online or by phone 71
Financial education classes 64Online financial management tools 51Credit counseling 39Debt management 24Payroll advance 17Short-term loans 22Student debt repayment 18
• Motives: to help employees and company
• 41% & 53% say productivity and company loyalty are improved, respectively
Lower-Income Employees
Survey of 16,343 lower-income tax filers
Less than 10% said employers offered a financial wellness program (except split deposit)
Much higher utilization among employees w/difficulty covering usual expenses
Most interested in split direct deposit; also interested in payroll advance loans, financial coaching, online tools
Considerations for Employers
Survey your employees; note differences by age, position/pay
1
Engage employees in designing wellness solutions
2
Consider existing resources: EAP provider, nonprofit and federal government resources
3
Existing Resources
• FDIC Money Smart
• Consumer Financial Protection Bureau (CFPB) - financial education materials
• National Foundation for Credit Counseling – local accredited providers
• Local banks/credit unions
• Savings programs
Considerations for Employers
Financial wellness program no substitute for good wages and health benefits, paid leave
4
Consider both high-and low-touch products and services: financial education alone is not enough
5
Choose provider w/track record of promoting financial security; avoid untested, deceptive, or abusive services
6
Short-Term Loans
• Loans needed to cope with financial emergencies
• Few banks offer short-term, unsecured installment loans
• Payday loans: triple digit interest rates, quick lump sum repayment
• Employers don’t want to make loan decisions
• Payroll-deducted installment payments may help improve credit scores
Download the Primer
• Additional tips for each type of wellness product or service
• Examples of financial wellness providers
References
JP Morgan Chase Institute. (2015). Weathering volatility: Big data on the financial ups and downs of U.S. individuals. https://www.jpmorganchase.com/corporate/institute/document/54918-jpmc-institute-report-2015-aw5.pdf
PricewaterhouseCoopers. (2017). 2017 Employee Financial Wellness Survey. https://www.pwc.com/us/en/private-company-services/publications/assets/pwc-2017-employee-wellness-survey.pdf
