In today’s tough economic environment, employers are increasingly concerned with their employees’ financial well-being and are keen to help them become better financial planners. But any efforts companies make to get people more committed to proper financial planning, both in the present as well as for the future, can go to waste if they’re not doing it in the right way, said Liz Davidson, founder and CEO of financial education firm Financial Finesse.
That means encouraging employees to think small and set their financial planning bar lower by following small, incremental steps.
“It sounds so simple, but you have to start with the participant and what’s best for them,” said Davidson. “You’ve got to get people to care [about financial planning], but rather than hitting them with jargon and big-picture stuff that can be overwhelming, it’s best to give them a number of very easy and limited steps to follow.”
Because human beings are wired into the idea of routine, winning something on a small scale is usually the greatest motivator to try and win again. It may seem obvious, Davidson said, but for the longest time, many employers just couldn’t get a handle on this, and as such, “have been frustrated by human nature.”
Now, though, there’s been a sea change in the way employers are approaching their employees financial well-being, and many companies, Davidson said, have understood that they have to understand human nature and “work with it.”
Over the past year, Financial Finesse has seen a significant rise in the number of companies wanting to institute holistic financial wellness programs for their work force.
The trend, Davidson says, stems first and foremost from employers who are anxious to help employees reduce expenses, pay off debts and save more so that they are protected in the event of a double-dip recession, a change in benefits or increases in health care costs, inflation and taxes. But rather than following the traditional approach to financial education, more and more companies now want an end-to-end financial wellness program that centers on helping employees develop and sustain positive financial habits for their working life and beyond, she says.