Many employers want to help employees improve their financial health, but they worry about the cost of offering a financial wellness program. Yet effective programs needn’t be expensive. Employers can achieve their goals and still stay within their budget by driving wider use of existing benefits while adding new cost-effective benefits. This can boost employee satisfaction and productivity while helping employers attract and retain talent.
To design a cost-effective financial wellness program that also gets the best possible outcomes for employees, employers should consider a two-step approach to program design:
- Select the “right” offerings. Companies whose workers have lower average incomes might want to offer an emergency savings feature, for instance. To attract Millennials, an employer might want to increase spending on student loan debt repayment programs while de-emphasizing Health Savings Accounts.
- Implement design features that help employees overcome behavioral biases. Behavioral biases such as inertia, giving in to impulses, or underestimating risks can get in the way of adopting behaviors that boost financial wellness. Financial wellness benefits should be designed to make it more likely that employees will adopt positive financial behaviors without a considerable amount of effort.
Employers can also use data analysis to better determine which offerings are likely to drive employees’ financial decisions and achieve the employers’ desired business outcomes. Employers may want to be able to predict when their employees will retire, for instance, and can use predictive data models to better understand retirement patterns. Then employers can design retirement plan and financial wellness program features that help drive employees’ decisions that are in the employees’ best interest.
Choosing the right benefits and design elements in a financial wellness program are critical to getting the best possible outcomes for employees. Properly designed, they can do so without breaking the budget.