Convergence is often defined as the process of two separate entities coming together toward a common point, like when two roads intersect, or, on a much larger scale, when universes collide.
A convergence of a more galactic nature is taking place in the employee benefits marketplace as the needs of both employers and employees intersect. This intersection is leading to a new employee-benefits dynamic and never-before-imagined opportunity for benefits producers and agents: As employees are seeking help with their personal finances to achieve greater security, employers are looking for ways to help them achieve just that as a way to improve employee engagement and productivity.
Increasingly, employees need help evaluating and managing their personal financial and benefits needs as money issues spill over into the workplace. Nearly one in four employees say personal financial problems have become a distraction at work, according to a 2014 survey of financial wellness issues by PriceWaterhouseCoopers. Meanwhile, money issues have consistently topped Americans’ list of biggest stressors since 2007, the American Psychological Association reports. These factors are a big contributor to lost workplace productivity.
Employers are feeling this pain and are taking steps to help employees address their personal financial issues, both for altruistic and business reasons. A recent Aon Hewitt survey found that nine out of 10 large employers want to introduce or expand financial wellness programs in 2015. Anecdotally, employers are also looking to better manage costs – a never-ending quest – and make their benefits packages more effective by better meeting employee needs.
This movement towards improved financial wellness is taking place as employers offer more benefits on a contributory or voluntary basis. Long gone are the days when paternalistic employers paid for a generous menu of life, health, disability and pension benefits for each employee. Today, employees are left alone to determine their personal financial needs and then mix and match their benefit choices as best they can. Often, employees are overwhelmed and struggle to decide what makes sense for them; too often, they punt by making no decision at all.
The shift in benefits availability and cost is leading to a convergence as the common interests of employees and employers in financial security and workplace productivity align. There is an opportunity for everyone in the employee benefit space to provide better guidance tools and resources to assist employers and employees make better decisions holistically across all their benefits.
Benefits providers are now launching, revamping or redesigning tools to promote better decision-making and outcomes about employee benefits and financial security. Many tools address needs such as health care or insurance protection or retirement, and some address multiple needs. The best tools provide personalized guidance and recommendations on a comprehensive set of needs based on data about employees’ personal lives and finances, including their family situation, income, budget obligations, financial risks, and current insurance protection and retirement savings.