When it comes to financial wellness at the workplace, a knowledge gap may be hindering smaller employers from competing with larger companies. But support is available for small companies to catch up.
Overall, research by MassMutual shows that the deployment of financial wellness programs at the workplace is expected to nearly double within the next few years. Currently, 42 percent of employers offer financial wellness programs, according to the MassMutual Financial Wellness at Work Study. However, only 37 percent of small firms say the same, the study finds.1
If your company is one of 37 percenters, congratulations. You’re ahead of the curve. But there are some important considerations for those companies that have not yet taken the plunge into greater financial wellness.
The No. 1 reason why companies have not yet introduced programs is a lack of knowledge, the study concludes, with half of small companies that do not offer programs pointing to the need for more information. Small companies are defined as those with retirement plans that have between $1 million and $5 million in assets.
The good news is that the number of companies overall that are expected to make financial wellness programs available to their employees is expected to double within the next few years or so. Overall, 19 percent of employers are in the process of implementing wellness programs and 19 percent say they plan to introduce programs within the next three years, the study finds. Smaller companies are a big part of those numbers.
Small companies are already on par with their larger peers when it comes to motivations for offering financial wellness programs. The most powerful motivation, 90 percent of employers of all sizes report, is they “really care about their employees.” No surprise there for smaller companies whose owners often regard their workers as family.
While altruism is great, financial wellness also has a business side. Eight in 10 employers report motivations such as the opportunity to support employees at a minimal cost, being on the “cutting edge of benefit offerings” and gaining an edge in hiring, the study finds. Overall, 72 percent of smaller firms say it’s important to offer financial wellness programs.
But the importance of financial wellness can no doubt take a back seat if an employer feels more information is needed before moving ahead. Especially if the employer is among the 41 percent that expressed concerns about costs.
With the right program design and tools, costs can be minimal. Financial advisors that support retirement plans may be able to connect employers to effective resources to establish a financial wellness program, including tools, education, voluntary products and others. Another good resource to learn more is other employers that already offer financial wellness programs as many report having a solid grasp of what works and doesn’t work.
For instance, 47 percent of employers said a program should address an employee’s full financial picture. Others pointed to combinations of retirement, insurance, education benefits and advice. Credit and debt counseling, help with medical costs, childcare and elder care were other popular benefits that were mentioned.
MassMutual is introducing non-traditional workplace benefits to address a wide variety of financial wellness needs, including emergency savings, college tuition repayment and refinancing programs, Health Savings Accounts, critical illness and accident coverage, and others. More are on the way.
These benefits are available on a voluntary basis meaning there is no cost to the employer. Employees can simply pick and choose what they need. Many benefits such as tools for budgeting and debt management, to name a few, are available at no cost.
So how do employees determine what they need? Many employers point to the need for online financial planning tools as essential for an effective financial wellness program.
With that knowledge, MassMutual designed its MapMyFinances* tool to help employees assess their personal financial situation through a financial wellness score, prioritize their financial goals and employee benefits based on their family situation and budget, and receive a personalized game plan to continue improving their overall financial security. The tool is available free to any employer that sponsors a MassMutual retirement plan or voluntary benefit.
As more employers learn about the benefits of financial wellness programs as well as the relative costs and commitments, the number of companies that offer programs is expected to swell. Any gap in knowledge on the part of smaller companies will be replaced with the knowledge that their employees are on track to greater financial security.
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1 The MassMutual Financial Wellness at the Workplace Study, 2019.
* Guidance may not be available for certain products. Guidance is based on MapMyFinances assumptions and information provided by the employee and employer.