I talk to a lot of small business owners and HR professionals who want to increase participation in their employer retirement plans. They invest a lot of resources into retirement benefits for employees, yet many are frustrated by low participation rates.
In an effort to get employees interested in retirement plans, some employers try innovative techniques. For example, the office-supply company Staples created a vampire-themed game to make planning for retirement and money management more appealing to its busy associates.
The Problem With Retirement Planning
Vampire games aside, retirement planning is a long-term goal. For employees who are concerned about the short term, retirement planning seems like it can be put aside for more immediate needs like saving for a house, emergency fund, or car loan. In many ways, short-term thinking sucks the life out of long-term planning, much like a vampire.
So, how can you help employees with the short-term financial needs so that they can have the ability and incentive to participate more in your financial benefits program?
Financial Wellness Programs Ease Short-Term Thinking
The more financially literate employees are, the more likely they are to participate in employer-sponsored retirement plans, flexible spending accounts, and health savings accounts. For this reason, many companies are implementing financial wellness programs.
Benefits consulting firm Aon Hewitt surveyed roughly 250 U.S. employers representing nearly 9 million workers in 2017 and found that 92% of them, nearly all, were planning to focus on the financial wellbeing of its employees beyond their retirement needs, such as help with managing student loan debt, budgeting, and even physical and emotional health. At the time of the report, 58 percent of these employers had a tool available to cover at least one aspect of financial wellbeing; by the year end, that percentage was expected to rise to 84%.
Megan Yost, head of participant engagement at State Street Global Advisors’ defined contribution retirement plans, commented to CNBC that, “It's a cultural shift. Financial wellness takes a more holistic approach to an employee's finances. It's about reducing financial stress and improving productivity.”
By teaching employees how to handle short-term financial issues, long-term goals — such as retirement — become attainable. A financial wellness program at work is a win-win because it reduces financial stress for employees. And that creates a stronger and more productive work force, helping your bottom line.
We have an assortment of tools to help you and your human resources team promote financial wellness to your employees. We can stop by with ice cream as a quick pick-me-up for your staff, we can provide Lunch and Learn seminars for your employees (yes, that’s a free service with free lunch!), and we can set up a table (with giveaways) to provide employees with information on our products and services. We're booking now, so we invite you to contact Maria Porto, AVP of Partner Relations, at firstname.lastname@example.org today.