Employee Engagement a Better Financial Wellness Metric, Study Says
Suggesting that it’s time to change the return-on-investment (ROI) conversation with respect to financial wellness programs, a recent paper contends that a more effective way to prove a program’s value is by measuring employee engagement.
Ernst & Young explains that creating a suite of benefits is pointless if your workforce is not taking advantage of the resources provided to establish a path to financial wellness. Instead of focusing solely on a metrics-driven assessment, the paper
submits that measuring levels of utilization will give leaders a “new perspective on the value of their investment.”
While acknowledging that many organizations want metrics to validate the expense of a financial wellness program, the paper says that ROI can be difficult to measure and may not be the most reliable benchmark. It notes that sick days, productivity and other indicators fluctuate, and factors unrelated to financial stress could account for those changes.
The paper notes that the selection criteria and perceived benefits varies among those who already offer a program and those who don’t, based on the results of a survey conducted with 200 HR professionals. Those who have yet to offer a program focus on cost, which shows that justifying the price remains a stumbling block for some. Among those without a program, 59% say the top selection criteria is price, followed by ease (53%) and breadth (44%) of the program. However, once a program is in place, the focus becomes more about employee engagement across the breadth of the program (47%) and less about price (35%).
In addition, the survey found that companies without a financial wellness program had a more limited vision of the potential benefits. For those respondents, 50% consider it a way to boost retirement savings, 38% see it as a means to help employees boost savings overall and 31% believe it could lead to greater retention. On the other hand, companies that offer financial wellness plans saw a direct correlation to employee well-being, retention and productivity, with 56% of respondents citing retention, 50% citing health and 45% citing productivity as the main benefits.
The paper emphasizes that employees who become more active in financial planning build the confidence they need to continue their path to financial wellness. Moreover, alleviating financial stress clears the way for more productive workers and ultimately generates a higher return on investment, the paper suggests.
Determining employee base demographics and understanding how they think and feel about money are the first steps in the process, the paper explains. A financial wellness assessment can help uncover these more “subjective beliefs” and enable a provider to craft personalized communications, which will lead to improved benefits engagement.