Study after study shows that money stress can be as bad for workplace productivity as back pain, according to Reuters.
The latest study, released by PwC on Tuesday, found that a quarter of US workers said financial worries caused them health problems. Forty percent said finances distracted them at work and 15 per cent said these problems made them miss work, according to the study, which was conducted in February and surveyed 1,600 working US adults aged 21 to 75.
That is why companies are providing a more robust menu of voluntary financial wellness benefits, sometimes with cash incentives or discounts, to help employees manage their money.
“They are starting to see that a 401(k) is not enough. Employees say: I have present-day needs I have to take care of before I can take care of retirement,” said Chris Whitlow, chief executive officer of Edukate, a workplace financial wellness provider.
A study released in May by Fidelity Investments and the National Business Group on Health found that 90 per cent of the 162 companies they follow now include financial wellness programs, such as debt management and budgeting. About three-quarters offer some form of stress management training.
Help can come in the form of cash for student loan repayment – at an average of $100 a month – access to mortgage brokers or tax preparation services. Many companies are even providing discounted services for everything from car-buying to pet insurance.
Offerings can be tailored to the demographics of a company’s workforce. Whitlow said retailer Walmart recently added a feature that allows employees to get advance payroll, so they did not have to use expensive payday loans. Walmart, which is the largest private US employer, raised its starting hourly wage to $11 in 2018.
Other companies are doubling down on campaigns to raise awareness and educate, such as insurance giant Prudential, which launched a $5 million partnership last year with the Aspen Institute, a think tank, to create new financial wellness tools for workers and a road map for companies.
Before it merged with computer maker Dell last year, Boston-based tech firm EMC was winning accolades for its offering called “WealthLink,” which provided tools for workers to jumpstart retirement savings, said Roselyn Feinsod, senior partner and retirement practice leader at benefit consultant Aon Hewitt. Now that program is part of “Well at Dell.”
But most of all, what employees say they want is personal advice when they need it, Feinsod said.
While providing personalized advice to thousands of employees sounds daunting, at Eastman Chemical Co, ramping up financial wellness offerings for its US workforce of about 10,000 has not been that complicated, said Lori Glawe, vice president of total rewards.
Headquartered in Kingsport, Tennessee, the specialty chemical company’s employees range from scientists to engineers to machine operators.
Finances to Face-to-Face
Advisers from Fidelity, which administers Eastman Chemical’s retirement plan, used to visit quarterly, but employees kept asking for more face-to-face interaction. Now Fidelity representatives visit multiple locations all the time – at least 12 days a month at corporate headquarters along with regular visits to more than 25 US satellite locations.
Rather than following the standard format of group seminars or lunch lectures to discuss money issues, advisers meet individually with workers for 45-minute sessions. There is no limit on the numbers of meetings a worker can have with an adviser and no restrictions on the topics they can tackle. Spouses and children can attend, too.
Getting employees to defer more of their salaries to retirement savings is a top priority. The company is now averaging a 9.9 per cent annual contribution, well above the industry norm of 8.8 per cent, said Glawe.
Prompting workers to save more money in their health savings accounts is a bigger challenge. These tax-favored accounts are available only for workers with high-deductible health plans and allow them to save money for medical costs – with the goal of accumulating an emergency fund that can be used all the way through retirement. Employers usually make cash contributions yearly into each participating worker’s account.
About 95 per cent of Eastman Chemical’s eligible US employees are contributing to an HSA account, above the normal participation rate of 84 per cent. But few are using their HSA as a true savings account, instead spending their yearly contributions on today’s medical needs.
One of the ways Eastman measures success is that about half of its workers who have engaged with an adviser are making a financial decision after attending a workshop or a meeting.
“We spend a lot of time talking about why you are better off putting the money in your pocket first,” Glawe said.