The Value of Financial Wellness Benefits in Times of Turmoil

December 10, 2020

A climate created by chaotic markets, a pandemic and times of economic uncertainty might not seem like the best moment to discuss a financial ideal – the concept of using financial wellness programs to help employees plan and manage their finances.

And yet, here we are. That’s because amidst the stress and turmoil that has summed up 2020, I’m convinced that this is exactly the right time to explore the increasing value of these programs to assist employees in successfully navigating not just towards a bright future, but also through the most difficult of financial times.

I have a belief that stress causes people to listen better. Hard times can inspire interest in rising above a challenge, figuring out how to plan better, do better.  This has me thinking a few things about our current financial environment:

  1. Employees who are participating in financial wellness programs see firsthand the benefits of their planning. They may talk about this with their peers.

  2. Employees who have access to a financial wellness program but haven’t yet utilized it may be increasingly interested – due to circumstances, or peer feedback.

  3. Employers without this employee benefit have an opportunity to implement one, which may aid in alleviating the massive amounts of financial stress that have arisen for their employees during these chaotic times.

A study from UBS Workplace Wealth Solutions (UBS Workplace Voice: A Benefit Whose Time Has Come) finds that employees who participate in financial wellness programs offered by their employer are:

  • more confident in their financial future,

  • more knowledgeable about money,

  • increasingly loyal to their employer,

  • better at making financial decisions,

  • satisfied with the support they are receiving during the COVID-19 pandemic.

The study was conducted in the spring of 2020 as an edition of UBS Workplace Voice, an online industry-wide survey of 1,209 US based employees across various industries, service providers, ages and asset levels; 320 of the employees currently participate in a financial wellness program offered by their employer.

I found the insights from the study to heavily support the perceived benefits originating from financial wellness programs. Some of the gaps in employee perception, based on whether they participated in a program or not, were pretty dramatic. In their UBS Workplace Voice, Issue 1, UBS reports details on their survey findings, some of which are summarized below. 

Financial wellness participants feel more confident in their financial future

Attitudes towards overall financial well-being are dramatically better for financial wellness program participants than non-participants, with 83% of participants citing their relationship with money as “excellent” or “very good.” In contrast, only 46% of non-participants reported the same perspective.

Nearly three-quarters of participants (72%) feel highly confident about achieving their financial goals, compared to just 36% of non-participants.

Financial wellness programs foster company loyalty

As equity compensation professionals, we have long known that employees expect more out of their employer than just a paycheck. One of the core goals in offering a portfolio of employee compensation and benefits is to foster loyalty and retention. 

Not surprisingly, the UBS study reports that 7 in 10 employees agree that the companies they work for have a responsibility to help them achieve financial wellness. Here’s how employees responded to the following statements:

“I view my company favorably”
87% of participants | 59% of non-participants

“I’m motivated to go above and beyond”
91% of participants | 58% of non-participants

This data was collected during the COVID-19 pandemic and makes a strong case for employers to seriously consider the potential positive impacts that a financial wellness program could have on employees and their resulting loyalty towards the company.

More comprehensive programs deliver even greater employee confidence and loyalty

The number of key features included in a financial wellness program does matter. This does not surprise me at all – I’ve long observed similar attitudes when it comes to employee stock purchase plans – the more features (particularly potentially lucrative ones like discount and offering length), the higher the rate of participation.

When financial wellness plans have 6 or more key features, employees report higher levels of satisfaction about their financial well-being, level of knowledge about finances, and clarity about retirement goals. Programs with fewer than 6 features reported less confidence in these areas.

Similarly, satisfaction in their current role, overall view of the company, and long-term probability of retention were higher for participants whose financial wellness program offered 6 or more key features.

Participation in financial wellness programs varies by awareness, age and gender

UBS reports that awareness of the program is key to participation. While only 39% of employees are aware of a financial wellness program at their company, 68% of those who are aware do participate.

Men are more likely than women to be aware (47% vs. 28%) of a program and participate in it (71% of aware men vs. 60% of aware women).

Millennials are more likely to be aware of a program and participate than all other generations.

Impact of COVID-19 on perceived value of financial wellness program

The COVID-19 pandemic has created upheaval in the workplace, adding increased burden to both employers and employees. UBS reports some interesting insights on how employees feel about the support their employer has provided during the pandemic and how that correlates to participation in a financial wellness program.

81% of participants report feeling “highly satisfied” with their company’s support during the COVID-19 crisis, compared to just 46% of non-participants. Interestingly, only 1 in 4 employees say their company provided financial advice during this time.

Final thoughts

Companies expend a multitude of resources in compensating employees and providing benefits that will not only support the employee but drive retention and performance.

It is important to understand how financial wellness programs can translate to the value employees attribute to their benefits and overall feelings about their relationship with the company. The findings in UBS’ workplace voice study provides important insights into participant attitudes along with serious considerations for employers in contemplating whether to add a financial wellness program to their suite of benefits. I, for one, am in favor.

View the full report for UBS Workplace Voice study.