Ping pong and massages at your desk are nice. But companies are increasingly betting on another type of office perk for stressed-out employees: help with managing their financial lives.
Some 59% of employers say they are very likely to focus on improving the financial well-being of their workers this year in ways that extend beyond retirement decisions, according to a recent survey by Aon Hewitt. That’s a big jump from 30% of employers in 2014, the human-resources consulting firm says.
A few years ago, employers mostly focused on encouraging employees to save in their 401(k)s and to select an appropriate asset allocation. Now, using a variety of approaches, from contests and cash incentives to offering apps for mobile devices, more employers are trying to teach employees financial basics such as debt reduction, and are offering more personalized coaching on financial matters.
“Employers are broadening their scope and realizing that saving for retirement, while still very important, is only part of their workers’ financial picture,” says Rob Austin, director of research at Alight Solutions, the former benefits administration and human resources outsourcing business of Aon PLC.
Several factors are fueling corporate interest in this concept, which is often presented to workers as “financial wellness,” experts say. Baby boomers are frequently looking for advice on how to make their money last in retirement; Generation X members can feel burdened by their financial obligations and added commitments to their parents and children; millennials, meanwhile, may be struggling to pay off their student loans.
Such issues can leave workers distracted, stressed and less productive. Employees with money worries may also be more hesitant to retire, have higher health-care costs and be more likely to leave for a competitor who offers them even slightly more money.
More companies are seeing a connection between financial and physical health, says Sarah Newcomb, behavioral economist at HelloWallet, a Morningstar Inc. subsidiary that helps employees manage their paychecks and workplace benefits. Such companies fear that an employee who is stressed about money may be more likely to have high blood pressure or ulcers, and hence be distracted and have higher medical bills, Newcomb says.
In light of such issues, employers are deciding that creating or expanding financial well-being programs is the “right thing to do,” according to the Aon Hewitt survey.
Videogame company Activision Blizzard Inc. is taking steps to support the physical and financial health of its employees. The Santa Monica, Calif.-based company has a “healthy incentive” app that encourages its workers to track their physical activity and eat healthily. The app rewards employees for such behaviors by giving them cash for their health savings accounts, which can be spent on health-related expenses.
The company also is piloting a program that offers a financial incentive for taking a mobile financial wellness assessment. Additional benefits are earned when they engage with a financial wellness coach and take steps such as refinancing a student loan at a lower interest rate, says Milt Ezzard, senior director of global benefits. In addition to earning cash toward their health savings accounts, employees can earn points that can be directed to raffles for prizes like a vacation, a wellness retreat or an annual gym membership.
To help its employees reduce personal debt, Movement Mortgage LLC, a mortgage lender in Fort Mill, S.C., held a 90-day challenge during which it encouraged its roughly 3,100 employees to reduce their combined personal debt by $1 million. For each employee, the company provided a copy of author Dave Ramsey’s “The Total Money Makeover” and provided a free personal financial assessment from Financial Finesse Inc., a firm that provides financial planning and education services in the workplace. Further training included six weeks of personal finance education videos.
After 90 days, 25% of the staff reported they had paid off a combined $2.8 million in consumer credit debt and saved $1.4 million in emergency money. Ten employees got a $1,000 check payable to a creditor of choice.
Some employers are extending financial-advice benefits to spouses and children as well. Some may give married employees an added financial benefit if both spouses meet with a financial planner, for example.
John Hancock recently introduced a program called College Coach to help employees and their families navigate the college admissions process. With College Coach, a division of Bright Horizons Family Solutions, former college admission and financial aid officers help families determine the best way to pay for college and analyze financial aid packages.
Companies are tailoring their advice depending on employees’ ages and needs. Instead of sending a blanket message telling workers to save for retirement, employers may send high earners who are near retirement targeted messages about estate planning, says Betsy Dill, senior partner, financial wellness at consulting firm Mercer.
“Financial wellness can be a highly customized experience,” Dill says.
Indeed, some apps are designed to link to the employee’s checking account and can make observations based on the employee’s spending. For example, if a worker has a large cellphone bill, the app may send him or her an email to remind them about the company’s wireless discount program.
To be sure, some employees may find such efforts by employers intrusive. They may also wish their employer would just give them a raise.
But experts say they haven’t seen employers mandate participation in these programs. They also say any data collected is typically managed by third parties and the employers have limited access to it.
Workers’ willingness to give their employers access to their personal financial information may vary by generation, some experts add.
“Younger people who may be more used to having the item they just searched for follow them around the internet may not find it creepy,” says HelloWallet’s Ms. Newcomb.
This article was originally published in the Wall Street Journal.