Checking Out the Deets of Financial Wellness Plans

(Part 2 of 2)

What Is Financial Wellness?

Okay, that first post took us on a bit of a journey, but we’re now ready to tackle financial wellness.

In the research in which I was involved, we specified:

Employees’ financial wellness means that they are able to satisfy ongoing financial needs, feel secure about their financial future, and are free to make choices that allow them to enjoy their lives. It also implies that employees have the competencies and knowledge needed to navigate the complexities of financial decisions.

So, you’re financially well (or, at least, weller) if you’re not stressed out about money all the time and able to afford the basics (for example, being able to go on vacation once in a while, live free of debilitating debt, save for retirement, etc.).

Of course, your average Joe might say, “Hey, if you care about my financial wellness, then just pay me more!”

To which employers might say, “Let’s table that discussion for a minute and talk about financial planning and earned wage access and …”

It’s very tempting to call bullshit on this HR-speak and just keep chanting “Show us the money!” But, well, capitalism. Employers have got to make a buck to stay in business and labor tends to be expensive. Therefore, employers want to pay you enough to get your services but not so much that you’re cutting to far into their profit margins.

It’s a dance, a negotiation, a horse trade in which you’re often the horse.

Feeling Strapped

If you’re not bringing that much to the trade–or at least fail to convince your employer that you are–then your pay is not going to be all that high. In that case, you may be living paycheck to paycheck. You may not be able to pay off your loans. Your monthy credit card debt may be so high that you’re barely able to pay the minium balance.

Which only gets you in deeper into the financial quagmires over time.

You could really use a hand.

So, you go to your boss and ask if maybe they can give you a raise. Your boss shakes their head sadly, saying times are tough, business is flat, and there’s a wage freeze is on.

After that talk, you’re feeling depressed, but then your boss shoots you an email that tells you about the company’s financial wellness program. Shit. You sigh. More confusing HR stuff. You try to avoid HR whenever you get the chance. You feel those folks tend to only show up when bad stuff is cooking.

Giving It a Try

But, hey, you’ve got to try something, so you call a number and they give you the rundown on what’s included in the benefits. Here are some of the possibilities:

  • Financial education
  • Retail discounts programs
  • Easy access to savings planning
  • One-on-one financial coaching/counseling
  • Health savings accounts
  • Retirement plans
  • Flexible spending accounts
  • Life and disability insurance
  • Help with medical bills
  • Lifestyle benefits
  • Low cost loans
  • Help with physical therapy/rehabilitation
  • Earned wage access
  • Payday advance
  • Personalized financial wellness plans
  • Student loan repayment assistance
  • Debt-relief benefits

The Pros and Cons of Financial Wellness Programs

The Pros

The pros are straighforward if the programs actually do what their providers say they will, which is:

  • Bump up employee productivity since employees are less worried about their finances
  • Retain and engage employees who are grateful for the help
  • Reduce financial stress, which can impact some of the other wellness issues we discussed in the prior post
  • Give employees better financial habits; that is, they become better at budgeting, saving, investing and handling financial emergencies.

The Cons

For employers, some percieved cons might be:

  • the cost of offering and implementing a financial wellness program
  • limited employee participation in the program, in which case the cost of the program may not be worth the money and effort put into it

For employees, some perceived cons might be:

  • privacy concerns related to sharing their personal financial information with their employer or a third-party provider
  • a lack of savings because their abilty to tap into to their daily pay becomes too easy via earned wage access
  • frustration if they receive advice or services that don’t really help them in the long run

The Limitations

I think financial wellness programs are generally a good thing, though their efficacy no doubt varies from offering to offering and company to company.

The bigger question: Are theseprograms bandaids being applied to proverbial bullet wounds?

There’s no easy answer to that question. It just depends.

Let’s say you take advantage of a program that gives you 1) same-day access to your pay and 2) financial education. The same-day pay has proven useful to you a couple of times, like when the car broke down and the dog got sick.

Meanwhile, the financial planning education has taught you about the dangers of credit card debt and high car payments, but the advice has been hard for you and your family to follow given your means and expenses.

Ultimately, you appreciate the advice and it helps at the margins, but you’re still going to need a raise or to find a different job that pays more. You sigh. Easier said than done. The rat race is getting to you.

In my next post, part 3 of 3, I discuss some ideas for programs that might do more to increase the financial wellness of Americans.

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Mark R. Vickers

I am a writer, analyst, futurist and researcher. I've spent most of my working life as an editor and manager for research organizations focusing on social, business, technology, HR and management trends. But, perhaps more to the point for this blog, I'm curious about the universe and the myriad, often mysterious relationships therein.

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