In a recent article, The Wall Street Journal notes that this year, close to two thirds of employers say that they are “very likely” to focus on ‘the financial well-being of their workers this year in ways that extend beyond retirement decisions.’ That’s close to double the number Aon Hewitt, a human resources consulting firm, reported in 2014.
WSJ’s Veronica Dagher discusses the issues different generations face with respect to their finances, or their financial wellness. Baby boomers seek advice about how to make their money last in retirement; Gen X struggles with countless financial obligations, staggering credit card balances, and retirement planning; while millennials have more student loan debt than ever before.
A few years ago, employers predominantly focused on appropriate asset allocation for their 401k accounts. Now, again according to the WSJ and countless other sources, more and more employers are putting a strong emphasis on teaching employees the basics and giving them the resources they need to succeed in their financial futures and their financial presents. Basics include strategies to reduce debt, saving for college, goal setting and tracking, digital financial wellness platforms, etc. A key element in this equation too that’s worth noting is human involvement. People can’t be expected to appify their way to wellness, which is why many employers are also offering personalized financial coaching coupled with digital tools to keep people on track.
“Employers are broadening their scope and realizing that saving for retirement, while still very important, is only part of their workers’ financial picture.” – Rob Austin, director of research at Alight Solutions, the former benefits administration and human-resources outsourcing business of Aon PLC.
“It’s wildly important that employers start to take action with respect to the financial futures of their employees,” said Steve Wilbourne, CEO Questis. “This isn’t a cross our fingers and hope it goes away type problem, nor is it a lather, rinse, repeat solution. We need to not only get to the heart of the problem, but then, we need to give people a simple, digestible, personalized pathway to change. It’s only then that the ‘wellness’ of people and of companies will start to see progress.”
Financial wellness and its impact on employee productivity has been widely researched by financial planning experts for more than two decades. Only recently, has the news that employees’ financial stress is resulting in significant costs to employers been making major headlines in the press.