Financial wellness: Good for the employee and employer


While wellness programs have been a key part of employee benefits programs for years, they now have a new and increasingly popular cousin: financial wellness programs.

Multiple surveys indicate financial stress and anxiety translates to distracted workers, increased absences and even health issues. Companies have started to recognize that all this worrying about money takes a toll on employee productivity and health in the workplace.

To address this, companies are adding financial wellness to their existing employee wellness offerings since this area is an important aspect of an employee’s overall well-being.

Now is the right time to focus on employee financial wellness. Employees are increasingly paying more out of their own pockets for health care expenses, and with the shift to 401(k) plans, they have assumed the risk and responsibility for their own retirement.

However, not everyone can afford to hire a financial planner for guidance. With financial wellness programs, employers have an opportunity to step in and offer much-needed assistance.

Financial wellness defined

While there is no single definition of what employers mean when they talk about financial wellness programs, there are some common characteristics. Generally, financial wellness is a comprehensive approach that supports an employee’s complete financial picture by looking at how all the pieces of an individual’s financial life fit together.

The goal of a financial wellness program is to enhance the employee’s overall financial well-being. To accomplish this, the program ideally should include two steps:

  • Creating a workable financial plan for both the short and long term

  • Enabling employees to make decisions to manage that plan over time

Historically, employers have focused on 401(k) plan education and saving for retirement. Financial wellness programs are more holistic, focusing on:

  • Budgeting

  • Getting out of debt

  • Setting aside money for emergencies

  • Saving for a home

  • Saving for children’s college tuition

  • PLUS retirement planning

An effective financial wellness program is not one-size-fits-all. Programs can include group educational sessions, individualized online learning and individual meetings with a financial professional, either in person or by phone.

It also is important to combine financial wellness with 401(k) plan education and design. Employees who do not know how to create a budget cannot understand how to manage and invest their 401(k) plan accounts. The best financial wellness programs include enhancements to the employer’s 401(k) plan, adding features that encourage participation and increased savings, such as auto enrollment and auto escalation.

Employer considerations

What do employers need to have in place to ensure success?

  • Get management buy-in upfront: More employees will participate if senior management is actively involved in promoting the program. This will go a long way in showing employees that the company cares about and is interested in their financial well-being.

  • Take surveys to measure outcomes: Employers should take a before and after survey. The questions for both surveys should be the same in order to better compare the results. In addition, for privacy reasons, the data collected must be anonymous or completely screened from the employer.

  • Offer both web-based and in-person training: Although web-based programs may be more easily accessible and provide greater flexibility, such programs offered by themselves might not be enough to lead employees to take action. Combining a web-based program with in-person and/or telephone meetings with financial experts who can address each employee’s unique situation and goals tend to be more successful.

  • Return on investment is not the best measure of success: It is virtually impossible to prove the ROI of a financial wellness program. Employers are better served by focusing on the purpose of their investment — reducing stress and boosting employee morale — which can ultimately improve the bottom line for both employees and the company.

Because the financial wellness provider will have access to personal financial information of employees, it is extremely important to follow a thoughtful and thorough vetting process that includes responding to a request for proposal, having all candidates provide written responses to the same carefully crafted questions and interviewing the top candidates.

Employers should look at no less than three service providers, thoroughly reviewing their services, contracts and costs before selecting a provider. Your benefits counsel is well situated to assist throughout this entire process. 

Lisa Zimmer is a partner with the law firm Warner Norcross + Judd where she concentrates her practice in employee benefits, focusing extensively in the design, implementation and compliance of retirement plans. She can be reached at

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