Many of today’s employees begin their adult lives without essential financial knowledge. They don’t know the basics of balancing a checking account, or how to use credit responsibly. Nor do they know how to save, budget, buy a home or plan for the future. Schools will teach students about history, but not money. In fact, according to the 2017 Financial Report Card1 from Champlain College’s Center for Financial Literacy, only 5 states earned an A on the ability of their financial literacy education to produce financially literate high school graduates.
Employers have started to realize that the stresses brought on as a result of financial illiteracy are negatively impacting their workforce in countless ways. Through this realization, we are starting to see financial wellness programs included in more employee benefit offerings. However, though employers are starting to embrace financial wellness, it doesn’t necessarily result in employees signing up for the programs offered. The key for employers is to ensure the financial wellness platform offered has natural motivators built in, to encourage employee participation. Most people participate in activities that are fun, competitive, rewarding or promote betterment. Activities within wellness programs should mirror these behavioral drivers, and these are all essential features of FinFit’s financial wellness platform.
Financial wellness allows employees to focus on their work
“Motivation is crucial for financial wellness to benefit most people,” says FinFit president David Kilby. “Otherwise the educational resources offered are like a library with no people in it. There’s a lot of really useful information, but if nobody is accessing it, the value is minimal at best.” Kilby emphasizes that successful financial wellness programs have three essential elements: financial education resources, motivational components, and real-world financial solutions. “Employers need to provide a workplace environment that allows employees to be productive and successful,” he says. “Financial wellness allows employees to focus on their work and not on their financial problems, generating increased productivity and reducing personal stress.”
We’re cheerleading great performances.
Regular, motivated learning and practice helps employees accomplish their financial goals faster and easier, putting them on the right path for the long term. “We even inspire them to cheat,” Kilby laughs. “We encourage them to discover the answers to probable FinFit IQ questions before the game even starts. We don’t look on it as cheating; we look on it as learning. But, Kilby notes, most employees benefit from a continuing external motivation or reward system to help ingrain new financial habits. “We are cheerleading great performances. It’s the way we humans are built.”
In this vein, FinFit is also adding other gamification techniques to their program in the future. Not only will this enhance and motivate member education, it will also increase the number of datapoints that are used to help individual members move forward financially. “We want more financial feedback,” Kilby says, referring to the four elements – ‘spend-save-borrow-plan’ – of a successful financial wellness program. “With more feedback and more data, we can actually help individuals meet their personal financial objectives by allowing the program to make suggestions based on their own habits.”
The objective is to help members increase their financial health.
The environment is holistic, Kilby attests. “We’re looking at savings, debt, income, banking, various kinds of credit products, and spending habits. The objective is to help members enhance their financial health and, where there are challenges, help them make positive corrections.”
FinFit is also looking at metrics from the employer point of view including turnover, absenteeism, borrowing against retirement accounts, and employees’ health. All of these factors directly impact productivity, employee satisfaction, employee retention and even health insurance costs. A recent survey of several thousand employers shows that a well-structured financial wellness program has accomplished things like decreased requests for 401(k) borrowing, reduced turnover, and increased job satisfaction – not to mentioned increased productivity.
Financial wellness, with a motivational component, is a win-win situation for everyone,
1 2017 National Report Card on State Efforts to Improve Financial Literacy in High Schools