Why Financial Wellness Is More Than Coaching and Seminars

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If you’re a business leader, you can probably agree you’d love to be part of a company filled with happy, healthy employees. And that’s especially true if you’re involved in making benefits choices.

One of the hottest topics in corporate wellness today is the question of how to help workers get right with their money. In a big pivot from the days of once-a-year 401(k) seminars or the offer of a one-on-one meeting with a financial advisor, companies are seeing that those benefits don’t meet many employees where they are with their finances. What’s more, they rarely result in long-term behavior change with money.

But the industry is witnessing a paradigm shift: Financial wellness as a benefit actually means helping your employees change their behavior around the most basic money topics. This behavior change is essential, and one that many workers desperately need. Consider that most of today’s workers are:

  • Unprepared for big emergencies. Layoffs happen. But only 29% of Americans would be able to cover the six months of living expenses widely recommended by financial experts as the upper end of a truly healthy emergency fund. (1)
     
  • Exposed to medium-sized shocks. Money-scares on a smaller scale don’t look much better. Nearly half of American workers admit they don’t have a big enough rainy-day fund to cover three months of living expenses.
     
  • Unable to pay at least $1,000 in cash. If the lack of emergency funds doesn’t convince you how ill-prepared most workers are, this should. Even smaller financial surprises can set most Americans back. In the event of an unexpected $1,000 expense, 61% would not be able to cover it with cash. (2)
     
  • Uncertain about retirement. About half of non-retired adults (49%) say they’re not sure they’ll be financially able to retire by the end of their careers. (3)

The paycheck to paycheck lifestyle is dominating the lives of many—and emergencies happen whether or not your employees have savings in place. When things like major car repairs or medical bills hit, most people borrow to cover them, and that’s when a lot of the financial pain begins. Millions today are languishing in debt and fretting about how to pay for it all. It’s an incredible drain on their wellness and their productivity  at work.

What’s more, treading water financially makes the idea of investing sound like a distant and improbable dream for many employees. It’s a cycle of extreme stress that impacts not only their own wellbeing but your company’s too.

The old approaches to financial wellness benefits just aren’t working. Let’s find out why, and then consider the best solution for your company’s employees!

Why Aren’t Annual Seminars Causing Greater Financial Wellness?

A lot of the business owners and HR leaders we work with have told us how glad they are to be providing a 401(k) benefit that allows their employees to prepare for retirement. That’s an awesome thing to do for your people!

Here’s the issue, though. Too often, when companies provide a 401(k) and offer an accompanying annual or quarterly informational seminar, they feel like they can “check off the box” for financial wellness. After all, when it comes to retirement, what else does anyone need besides a place to save money, some input on how to get it growing, and maybe a generous company match?

But we learned years ago that this model is not as effective for corporate America when it comes to getting people to change their money behaviors. We’ve seen that there is a stigma associated with on-site counseling, lunch-and-learns, and other seminars at work. Although this approach has consistently reached a certain segment of workers, we’ve missed a huge percentage of the population who want to keep their personal finances private.

And even though seminars allow you to check the box on financial wellness, the earlier stats prove this approach isn’t working for most employees. For the majority, they’re still living a paycheck to paycheck lifestyle. At best, they might go to a meeting to learn about mutual fund options, but they’d be unlikely to enroll. Many wouldn’t even attend.

It’s often a case of putting the retirement cart before the debt-free horse—and these horses are way too tired to push that cart without some guidance! Before they can jump into a 401(k) with confidence, they need a benefit that teaches them a few of the financial wellness basics:

When those concepts make sense for employees, the result is usually rapid and real behavior change. Because they’ve switched out of their old habits and into better ones, they’ll also experience some substantial financial turnaround in terms of debt elimination and savings!

So don’t feel badly if 401(k)s and retirement advice is all you’ve offered your employees for their financial wellness benefit. Just realize that it works much more powerfully for them when paired with inspiration around the subjects of budgeting, debt and savings.

Why 1:1 Coaching Isn’t a Scalable Solution

We get the popularity of the one-on-one meeting with a financial advisor as part of a corporate wellness program. After all, you’re giving employees the chance to sit with an expert and ask anything they might want to know about insurance, investment, estate planning or taxes. There’s a lot to know, and the issues matter both for workers and your business.
But recall what we’ve already learned about carts and horses. How many of your employees are truly ready to have productive conversations about those subjects? Some might be, but it’s unlikely they’re the majority. And similar to the financial seminars above, it takes scheduling commitments to get an employee (and their spouse) to come to the table regularly—which in itself is a hurdle for most busy families.

Even if you did have a mostly debt-free team that is on a budget and fully prepared for emergencies (wouldn’t that be awesome?), there are still several things that keep coaching from being a workable solution. One of them we touched on above: Some employees tend to prefer anonymity because they feel intimidated by a one-on-one meeting with a financial professional. Also, employees who do meet with a coach or professional might rely on them instead of changing their own financial behaviors. Finally, there’s the trouble of scaling a coaching program. It’s simply not workable to provide this kind of service to everyone on your team whenever they have questions or financial advice. And the cost only gets steeper as your business grows!

Here’s a much better idea. Why not give your employees financial wellness content that comes in the form of a flexible, online program? Ideally it would let them learn:

  • Whenever they want
  • Wherever they want
  • As often as they want
  • With their spouse
  • At their own pace
  • On any kind of device
  • With complete privacy
  • Without intimidation

Now that sounds like a scalable solution for growing businesses and a workforce on the move! It’s even better if it features inspiring content, stories of life change from real people who’ve succeeded with the program, and helpful tools that allow employees to track their progress with financial goals! It should also meet employees wherever they are on their financial journey and walk with them all the way through retirement.

SmartDollar Meets Employees Where They Are and Helps Them Change Behavior

Are you beginning to see why an emphasis on basics and behavior change beats seminars and coaching by a mile? To move employees out of the cycle of debt and stress and into a mindset of hope and wealth, they need a program that gives them clear, workable steps. SmartDollar helps workers get some quick wins and teaches them the right action steps they should take to set and achieve great financial outcomes. And we have the results to prove it!

Once your team’s engaged with our Baby Steps, they’ll be excited to make progress with their money and be more than willing to jump into a 401(k) with both feet! And with debt a thing of the past and healthy emergency funds in place, they’ll also be less likely to borrow their retirement savings back out when lightning strikes. You’ll even see a spike in productivity, a drop in unplanned absences, and fewer office hours spent dealing with personal financial issues.

Until recently, 401(k) seminars and coaching have reigned as the be-all and end-all of financial wellness. It’s great to know that many companies are now taking steps to help employees heal where it really hurts—in their everyday money struggles. SmartDollar empowers employees to make and maintain long-lasting behavior change that makes achieving their financial dreams truly possible!

Ready to see why SmartDollar is the only solution for your employees? Check out our webinar on financial wellness for teams of all sizes. Or, learn more about our financial wellness solution and why it really works at Smartdollar.com.