Financial wellness programs can be a valuable tool for helping employees achieve their financial goals, but they won’t be of much help if employees are not engaged and employers are not assessing their impact.
Enter a new report by the Retirement Advisor Council that seeks to help retirement plan sponsors design a Financial Wellness Program Management Dashboard based on the practices of leading retirement plan advisors. One strategy for the most committed employers to drive engagement in financial wellness programs is to implement a rewards or points program that incentivizes employees to use the program, according to the report, “Advisors Take Steps to Measure Employee Engagement in Financial Wellness Programs.”
Surveyed advisors say that, on average, 19% of their clients with a financial wellness program use a rewards or points program to stimulate participant engagement. Programs such as these have been quite successful on the health care front, where employees earn points for having regular medical checkups or going to the gym, the report notes, adding that they make just as much business sense in helping employees achieve financial wellness.
“I see more firms become interested in these programs,” observes Mark Ratay, Senior Vice President, Financial Advisor, and Corporate Retirement Director at Morgan Stanley. “Firms with younger employees and more professional groups seem to be more interested.” To drive participation, Ratay emphasizes that firms should push the offering out to the people, as opposed to just letting them know it is there.
Not surprisingly, service models vary greatly among plan advisors, but in pointing to estimates by the Consumer Financial Protection Bureau, the report notes that employers typically see an ROI of $3 for every $1 invested in a financial well-being program.
Measuring Engagement
To measure engagement, some plan advisors rely on feedback and updates from the plan sponsor by studying the results of employer surveys for example. Some monitor participant behavior by tracking participant attendance at meetings and the frequency of inbound calls to assess the number of participants who take steps to implement a plan with the help of a financial wellness counselor. And others rely on hard plan metrics when assessing the efficacy of the program, looking to engagement metrics or outcome metrics as indicators of success. These metrics typically include changes in participation and deferral rates to loan payoffs, emergency savings increases and the increased use of managed accounts or changes in asset allocation, the report notes.
Based on the percent of advisors relying on a metric, one of the most relied-upon employee engagement metrics is the percentage of employees who access a financial wellness portal by:
- Accessing a financial wellness portal (80%)
- Entering any data in a financial wellness portal (75%)
- Using any data in a financial wellness service or product (70%)
- Attending a financial wellness education session (70%)
- Obtaining a personalized assessment of their own financial wellness (70%)
- Employee satisfaction with the program (70%)
From there, employers can delve further into employee engagement metrics by tracking employees by age, gender, employment location, and role or position to pinpoint segments of the population who are at greater risk of delayed retirement, the report advises.
“Enhancing the financial wellness of employees over time requires some analysis to identify segments of the population who are perhaps left behind or disengaged so action can be taken,” the authors emphasize.
Commissioned by the Retirement Advisor Council’s Financial Literacy and Financial Wellness Promotion Committee, the report’s findings are based on a survey conducted July 14-31, 2020, among 70 council member advisors representing 8,209 plans and more than 4 million participants.
