Financial wellness programs are growing in popularity, but measuring their value and getting employees to participate remain major challenges.A Prudential Financial Inc. survey of 777 employers in 2017 found 83% of employers offered some sort of financial wellness program, up from 20% in 2015.
Such programs run the gamut from help with student loan repayments to establishing an emergency fund and budgeting, all with the goal of reducing employees' financial stress and bolstering workplace productivity.
The impact of employees' financial stress on their productivity cannot be ignored, sources said. A 2017 survey of more than 1,500 employees found that 30% of employees said they are distracted by their finances at work.
In the same survey report, PricewaterhouseCoopers estimated that a company with 10,000 employees could lose $3.3 million a year from such distracted workers.
But while the number of workplace financial wellness initiatives is growing, measuring their value remains tough.
In a Bank of America Merrill Lynch survey of 667 401(k) plan sponsors, 70% of respondents that offered financial wellness programs in 2017 said they lacked formal measurements to assess their value. Determining the value is difficult, industry experts said, for a number of reasons. Those include the subjective nature of some data; the infancy of some financial wellness programs; the lack of a common formula to measure value; and the effect of outside factors, such as the economy and company health. The latter, in particular, can influence employee behaviors and skew results.
Lori Lucas, president and CEO of the Employee Benefit Research Institute, Washington, said EBRI officials have heard from plan executives that in order to get the money to implement financial wellness programs they need to demonstrate a return on investment to upper management. Among the results management is looking for: improved retirement readiness, lower turnover, higher employee satisfaction and greater workforce productivity.