Yahoo Finance How Companies Invest in Financial Wellness
In between panting through pushups at your cubicle, you need not hear the oft-repeated stats about physical wellness in the workplace. What's more, you may be required to take those bothersome surveys by your insurer, tweaking your weight and blood pressure numbers the way some folks get creative with their taxes.
Or perhaps you're a convert, believing that the healthier you get, the more productive and happy you become at work and the fewer sick days you take. And employers, who certainly love that return on investment, are increasingly turning their attention to an investment of another kind: financial wellness.
"Over 80 percent of U.S. employers offer some type of wellness program," says Laura Putnam, author of "Workplace Wellness That Works" and founder and CEO of Motion Infusion in San Francisco. "Financial wellness, which is closely connected to productivity, sleep and stress, is one of the biggest trends that we're seeing now in workplace wellness."
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This monetary priority takes many forms, from new wrinkles in the traditional benefits package to assistance with financial issues outside the workplace. The thrust centers on putting money back in the pockets of workers who can always use the help, directly or indirectly.
"It's always about going beyond the 401(k), where many traditional employers would stop," says Catesby Perrin, senior director and head of development at SoFi, a San Francisco-based business that uses university alumni to refinance student loans.
As Perrin points out, help with college debt is a logical jumping off point for employers hoping to attract millennials entering the workforce. A generation ago, such a measure would've been unnecessary; today, it comes as a result of college debt reaching astronomical levels. By many estimates, the per-student debt figure has surpassed the $30,000 mark, with the total figure topping $1.3 trillion.
"Student loan assistance in particular is a benefit with near universal appeal -- and the most sought after talent is starting to expect it," Perrin says.
"I have seen emojis being used to engage with very young and new employees," says Chris Bruce, co-founder and managing director of Thomsons Online Benefits, with offices in San Francisco and London. Too bad there's not a green, teeth-gritting face for envy, as it would herald a wellness trick that's fairly slick.
"One of our clients emailed all employees not matching fully in the company retirement plan," Bruce says. "The message read, 'The person next to you is earning more than you,' basically saying that other people who take the full retirement match get more from the company. They wanted to create a water cooler moment and they saw full matching go from 24 to 82 percent."
And while it may appeal more to a younger set, anyone raised on Bullwinkle can appreciate the puckishness of ALEX. The employee communications platform uses web-based financial guides with retro, egg-shaped animated characters. Adopted by PepsiCo. (PEP), RedBull and Comcast Corp. (CMCSA), it's the creation of the Jellyvision Labs, a Chicago-based company. ALEX covers a wide range of financial wellness topics from the debt-retirement balance to simplifying complex benefit decisions.
"We mix humor and algorithms to help employees understand what can be a complicated, and, yes, boring subject," says Amanda Lannert, Jellyvision's CEO. "If you simply use a bunch of printouts shared across a company with no explanation, context, follow-up or discussion, then they'll certainly fall short. But if the program involves interaction and learning from the employee, and is built on understandings for how people learn and how they're motivated, then they can be amazingly powerful."
Along more conventional lines, financial literacy programs can provide the continual assistance workers need, especially if they hope to find the means to build an investment profile.
"People tend to not want to discuss their finances due to lack of knowledge or lack of understanding," says Rae Shanahan, chief strategy officer of Businessolver in Des Moines, Iowa. "Providing ways for individuals to educate themselves on items such as budgeting, having an emergency fund, understanding insurance and debt management are all key components." To that end, "employers can address this by providing access to learning centers."
Yet all the 21st Century talk of peachy investment portfolios and handholding for financially challenged workers obscures an insidious fact: Many companies have created money challenges for their employees in the first place. The ways range from slashing health care benefits while boosting premiums and co-pays, to eliminating pensions -- the latter now an a widespread phenomenon.
The Bank of America Merrill Lynch Workplace Benefits Report, released in April, sheds light on these issues. Based on interviews with more than 1,200 employees ages 18 to 69, the report reveals two key findings. First, soaring health care costs prevent employees from improving their finances; and second, employers play a key role in supporting financial well-being, and benefits should address all aspects of their employees' financial lives.
But unless you work in the public sector, landing a pension today translates to the monetary equivalent of finding hen's teeth in a haystack.
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"Contributions to pension plans are an expense of the employer, negatively impacting a company's reported earnings," says Clarence Kehoe, chairman of the tax department and a partner at Anchin, Block & Anchin, an accounting firm based in New York. "Contrast that with a 401(k), where an employee defers his or her own money into the plan -- at no expense to the employer."
That cost-cutting measure explains to some degree why pension plans have fallen out of favor. A Towers Watson study of Fortune 500 companies found that from 1998 to 2013, the number offering traditional defined benefit plans (another name for pensions) dropped 86 percent, from 251 to 34.
And here's the rub: Pensions provide guaranteed income streams in retirement to those who have them. How's that for financial wellness?
If pensions equate to a impregnable wellspring of financial wellness, taking them away amounts to whacking an employee on the legs, then offering him crutches to get around. But viewed another way, pensions give financial vigor right back to the company.
After all, if desk jockeys love that benefit, what are the chances they're going to go somewhere else?
"When companies abandon their role in helping employees secure their financial future, talent is a lot less compelled to stick around," says Mary Moreland, divisional vice president of compensation and benefits for Abbott Laboratories (ABT), based in Chicago.
Abbott has a pension program as well as a 401(k) match, a combination absent at many corporations. "There's a reason our voluntary turnover rate is so low, at just 7.6 percent last year in the U.S.," Moreland says. "That level of prolonged engagement at the company helps us build the business, reduces the costs of finding and training new employees and ultimately creates value for our shareholders."
Regardless of whether companies take a throwback or forward-looking approach, it's at least encouraging that more are showing interest in financial wellness -- or at least are feeling the heat to do so.
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"Employers of all sizes need to make financial wellness a priority in 2016," says Dan Hernandez, a financial planner with Lincoln Investment Planning in Voorhees, New Jersey. "Over the past couple of years, we've seen some really inspiring trends in the areas of physical and mental health. Companies are implementing healthy eating initiatives, allowing fitness breaks, and offering 24-hour mental health hotlines. The remaining and possibly costliest concern is their financial wellness."
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