As more companies add financial wellness to their suite of benefits, one question persists: “How do you know whether it’s paying off for the company?”
Ernst & Young released a report that aims to answer this question.
An EY poll of human resource professionals indicated that 86% of the polled organizations offer a financial wellness program. These offerings can range from technology-only applications and free materials from 401(k) administrators, to comprehensive programs that include financial counselors.
Some organizations don’t offer elements of financial wellness at all — 14% said they did not have a program, and half of that group have never considered it.
Of those who do not have a program, only 16% felt they could justify adding a financial wellness program without knowing the anticipated ROI. Among those who already offer some type of benefit, 34% felt they could offer the benefit without knowing the ROI.
(EY surveyed 200 HR professionals in a variety of roles, from general employees to C-level executives. The respondents represented 18 different fields, with the majority working in manufacturing, IT, health care and education service industries.)
The survey finds that the selection criteria also varies among those who already offer a program and those who don’t. Those who have yet to offer a program focus on cost (59%), which, according to the report, shows that justifying the price — the hallmark of ROI — remains a stumbling block for some.
By comparison, 35% of current financial wellness program providers say price is among the selection criteria.
Organizations expect the return on investment to justify the expense. However, EY thinks it’s time to change the ROI conversation.
“ROI can be difficult to measure and may not be the most reliable benchmark,” the report states. “Sick days, productivity and other indicators fluctuate, and factors unrelated to financial stress could account for those changes. Additional data may be with third parties, making it expensive to obtain and time-consuming to aggregate.”
Rather, EY thinks employee engagement would be a better barometer.
“[C]hanging the conversation from metrics driven assessment to measuring levels of healthy utilization will give leaders a new perspective on the value of their spend,” the report states.
To engage employees, EY suggests that organizations craft a multidimensional program and formulate a targeted communications plan to push employees to action.
“With those core components in place, employee engagement can then be measured,” the report states.
For example, a group learning session could introduce a related learning tool, video or invitation to speak with a financial planner.
“This approach teases out a continuous learning experience, vs. the start and stop of siloed activities, and yields stronger metrics of interaction,” according to the report
Unlike the third-party data needed to calculate ROI, these metrics come directly from the wellness program, which EY says makes them accessible and more accurately correlated to program performance.
The EY survey does show that those who offer financial wellness plans saw a direct correlation to employee well-being, retention and productivity. According to the survey, 56% of the survey respondents with wellness programs said retention, 50% said health and 45% said productivity were the main benefits of a financial wellness program.
Those without a program had a more limited vision of the potential benefits, according to the survey. Of those without wellness programs, 50% considered it a way to boost retirement savings; 38% saw it as a means to help employees boost savings overall; and 31% thought it could lead to greater retention.
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