Financial wellness improved for the average American employee in 2016, aided by an increase in the percentage of repeat usage of workplace financial wellness programs, according to Financial Finesse’s 2016 Year in Review report.
According to the report, retirement readiness has improved driven by the simple act of running a retirement projection. By running a retirement projection, about four in 10 employees discovered they are underfunded and need to make changes with how much they save, how they invest, and how they prepare for retirement. Six in 10 discovered they are on track for retirement, increasing confidence in their ability to achieve retirement goals. This is good news for employers that face significant costs due to employees delaying retirement.Improvement in Financial Wellness
Repeat usage of workplace financial wellness programs is gaining momentum, and financial wellness improved for repeat users in all major demographic groups. Employees who took a financial wellness assessment in 2015 then repeated it in 2016 reported higher levels of financial wellness in cash flow and debt management, retirement preparedness, and investment confidence.
Best Practices to Drive Repeat Usage
Employers reported using a variety of techniques to drive employee engagement in their workplace financial wellness program, including:
- Marketing their financial wellness program as an employer-paid employee benefit;
- Positioning financial wellness as a key component of an overall wellness program;
- Offering wellness incentives to participate;
- Offering unlimited one-on-one financial consultations via phone, in-person, or both; and
- Marketing the financial wellness program as part of other benefits communications, such as displaying information prominently on the internal employee benefits site and reminding employees during open enrollment or benefits changes that coaching is available.
Twenty-seven percent of employees who took a financial wellness assessment in 2016 reported being on track for retirement, up from 19 percent in 2015. Despite this improvement, employees across the board aren’t saving enough to meet retirement needs. Ninety-two percent reported participating in their employer-sponsored retirement plan, but only 77 percent are contributing enough to earn the full employer match. The problem of retirement under-preparedness continues to be systemic, with insufficient percentages of virtually all demographic groups saying they are on track for a comfortable retirement.
Improving the overall financial wellness level of an organization is a process that requires coaching and motivating employees to change entrenched financial behaviors. Financial Finesse’s 2016 Year In Review report can be found at https://ffinesse.box.com/v/2016-Year-in-Review-Report.