Implementing a Successful Financial Wellness Program [New Frontier of Wellness - Part 3]

While Financial Wellness seems to be one of the most popular trending topics among employee benefits and retirement plan professionals, how does this concept play into the big picture of overall "wellness"? In this New Frontier of Wellness series, AFS 401(k) Advisor, Alex Assaley uses his expertise and experience to explain how Financial Wellness programs are impacting people, why employers should consider them, and how to implement Financial Wellness for your own employees. 

In Part III, Alex walks you through the final steps to take when you finally begin the creation of your FW program and what to avoid, as well. 

Delivery: Providing employees with the three F’s – Friends, Feedback, and Fun

In his book, The Gamification Revolution, author and gamification guru Gabe Zichermann talks about the "three F's": Friends, Feedback, and Fun. His thesis is that creating workplace programs that are game-like drive employee productivity, happiness, loyalty, and corporate success. He cites compelling research from companies across all industries from Domino's Pizza to Delta Airlines and many, many more. While there is significant strategy that goes into gamification, one concept that we have borrowed and use in our own FW programs is the concept of these "three F's".

  • Friends – People like seeing, hearing, and measuring themselves with others. Create an environment where employees can engage, participate, and compete with friends (colleagues). Examples may be a points-based system, accrued through engagement and completion of various tasks within the FW program and a leaderboard that shows the status and rankings of employees. Alternatively, you may consider teams or groups that compete alongside one another, or community feedback and message boards within the program. We have to be considerate of the fact that financial topics are very private, even taboo to discuss in our culture. Nonetheless, this is a minor impediment that we can easily navigate around with some creativity.
  • Feedback – The program needs to be interactive. We strongly encourage a rewards-based program that gives positive feedback to employees when they are making wise decisions. For just a minute, let's think about this in the context of a health wellness program. One of the most common is a Fitness (or "FitBit") challenge, where employees have goals on hitting XX, XXX steps per day - usually 10,000. When you hit 10,000 steps, your FitBit notifies you and gives you feedback on the great job you are doing. Even better, it tracks your cumulative totals and notifies you when you make new records. This feedback drives our behaviors through the chemical response in our brains (dopamine and other at work - see guys like Simon Sinek, for more articulate depth on this). We need this same type of feedback in our FW programs. Naturally, employers think about financial rewards; and I'll admit it, we use that too in our Budgeting Challenge programs. However, according to Zichermann, financial rewards have the lowest level of value for a program user; the largest value - notoriety, which might be another reason for the leaderboard or competitions among employees. These are an important way of delivering feedback and also strengthening the friend element. Some good examples can be – funding HSA accounts, cash bonuses, healthcare premium reductions, additional PTO, team lunches, recognition, but certainly be creative in crafting your own.
  • Fun - Let's be real - it has to be fun. Financial topics and seminars are usually exciting for only 2-3% of an employee population - and usually, these are the folks that are "on track" with their financial goals. Most employees find it overwhelming, intimidating, or boring. To be fair, the financial services industry hasn't helped much - presentations are usually delivered via PowerPoint, using complicated terms and industry jargon, or from a canned-template because your provider is strictly regulated by several governing bodies (such as the SEC, FINRA, DOL, IRS, etc.) and doesn't want to provide advice If you want to see an example of a customized presentation should look like, check out some that we use with our clients.

Your program should have all of the following:

  • Expert presenters who are professionally-trained in adult learning and presentation skills.
  • Visually appealing complementary resources including a website, app, or content delivered in different mediums. For example, we deliver presentations in-person and via webinar, and also provide content through our blog, short-videos (both live action and animated), infographics, worksheets, and social media. These different mediums allow your employees to access information based on their preference.
  • Technology that aligns with the current landscape: To gain credibility and engagement, the look, feel, and delivery of the program needs to be cutting edge. Outdated and stale materials are an easy reason for your staff to check out quickly. It may not be obvious, but you’re competing for their attention along with all of the other content we get thrown at on a daily basis. People have extremely short attention spans nowadays and your employees will quickly move on to whatever video is going viral on YouTube that day if you don’t keep FW interesting. This doesn’t have to mean spending a lot of money, it just means you have to approach these topics creatively. Think about what you would find interesting and engaging.

financial wellness date white paper

Measuring Results: Create accountability and measure success metrics

Much of what we've already discussed are ongoing processes you will have to manage throughout your FW program. It’s very important that you have a process to identify and measure certain success metrics and create accountability for your employees, your organization, and your service providers.

Based on the feedback and survey results from your employees, you should have identified certain areas you are trying to improve for your employees' financial well-being. This could include:

  • 401(k) / Retirement plan participation, full match utilization, retirement readiness;
  • Health program participation, appropriate benefit selection and funding (with HSA and FSA plans), claims and coverage efficiency;
  • Financial well-being measurement metrics, which may include:
    • Student loan debt payment and reduction statistics;
    • Installment and credit card debt payment and reduction statistics;
    • Emergency savings accumulation;
    • Short- and medium-term goal milestones;
  • Event attendance, participation, and program completion.

The first two items on this list are traditional metrics that your retirement plan advisor and health benefits consultant should already be reviewing with you. The last two metrics are more targeted financial wellness statistics that should be measured and reported back to employees as a piece of "feedback" and engagement to help them remain accountable as they take steps to improve their financial wellness. Additionally, your FW consultant should compile and aggregate this data in order to report it back to your FW Committee and leadership to help identify the progress the program is making for your employees as a group. These metrics, captured at the organization level, will be important drivers to identify the value and benefit of the program.

Measuring ROI: The "holy grail" to an explosion of financial wellness programs in the workforce is the ability for companies to measure the return on investment (ROI), of this program for their company and its bottom line. There are already numerous research studies that talk about the benefits of an FW program, which we summarized in Part I of this series. This data alone is enough for some of the most altruistic organizations to move forward with an FW program and gain value from the success and progress made by employees. However, many finance executives want to see real data and impact at their company, not examples of results across a broad spectrum of organizations. Today, there are a few firms and forward-thinking experts who are building the mechanics to deliver this measurement of ROI to corporations and their finance and HR departments. For example, Hugh O’Toole of Viability Advisory Group (and speaker at our 2016 Employee Benefits Symposium), has created a patent-pending tool to do just this, show CFOs how an impact on employees’ financial lives can have a positive impact on productivity and a company’s financial statement, but it is most certainly one of the first of its kind. I think you will see many more tools, calculators, and reporting to help measure ROI in real-time for corporations, when it comes to the investment in financial wellness programs.


What to watch out for - Avoiding pitfalls:

There are definitely some "not to do's" to make sure you avoid when considering and developing your FW program. While we spent a lot of detail on how to structure a program, remember to avoid:

  • Delivering financial wellness "just because" your peers and marketplace are doing it.
  • Setting up a program that doesn't align with your corporate culture or benefit offering.
  • Management who isn't engaged/championing the program.
  • A program offering which doesn't match your employees' needs or goals: 
    • Have you asked employees what is important to them or are you just guessing? Most employers think they know their employee-base (and many do), but assuming you know the financial wellness services that will make a difference for them is akin to building a strategy on "hope" and will probably end up being an expensive experiment without results.
  • Engaging service providers for "free". While you might find a unicorn, odds are you are going to get your employees a sales pitch thinly veiled as financial wellness.
  • Technology and program materials aren't prioritized. You definitely want to have a program with depth - delivered with expert guidance that will produce results. However, in our current technology age, consumers demand that these types of programs are delivered with a minimum requirement of current technology and visual appeal. It doesn't mean you have to spend big - but this is important to ensure engagement.
  • You aren't going to measure your program. In order to understand the benefit of the program and where you are taking your employees (with respect to their financial success), you need to have a mechanism for accountability and measuring success metrics.

We believe holistic financial wellness is the path to a better workforce and a better life for your employees. During the last 5+ years, the growth of financial wellness in the workforce has created numerous different programs and methods, and ultimately a lack of clarity in the definition of financial wellness. Like any "new technology," as this concept and service evolves we will undoubtedly experience a more refined and synonymous understanding of financial wellness. Nonetheless, I think the flexibility and customization of these programs are what will make them truly beneficial and valuable to both an organization and its employees. It is no secret that this is a big component of the future for our firm and clients - and in following these steps above, we have found a prescription that currently helps companies align and maximize the value of their benefits program and helps their employees make wise decisions for their financial future. A year from now... who knows, the steps above may be completed refined or reinvented, so stay tuned