“Compounded financial woes create stress that often accompanies employees to their worksite.” Dean Clune and Terri Orem offer ideas for employers to give employees guidance and resources for financial wellbeing without being prescriptive.

Life comes with uncertainties, and employers are investing in new ways to help their workforce prepare for some of the most important “what-ifs.” In the realm of personal financial security, they’re fostering a sense of resilience — helping employees prepare for the unexpected by planning better for the expected. Financial education tools and voluntary benefits put the focus squarely on adopting healthy, lifelong saving and spending habits. Importantly, they enable employees to make better sense of what often seems like conflicting or confusing advice.

The government shutdown of 2018–2019 highlighted the fragile state of employee financial wellbeing. Research has found that 78% of workers live paycheck to paycheck and more than 1 in 4 don’t set aside any savings each month.¹ Compounded financial woes create stress that often accompanies employees to their worksite, where it negatively affects productivity and promotes absenteeism. Prolonged anxiety can also lead to health concerns and even work conflicts.

Employee guidance, not recommendations

Some employers are cautious about providing their workforce with access to financial education because they’re concerned this benefit may feel too intrusive or prescriptive. Yet they can offer resources that guide employees to more successfully navigate their own financial decisions — instilling confidence and empowering self-reliance. Financial literacy is often improved with exposure to topics such as: the difference between a Roth and traditional 401(k); how to earn the full employer match in the 401(k) or 403(b) plan; the benefits of an automatic rate escalator; how to minimize taxes; the advantages of health savings accounts; and retirement savings projections.

Recordkeepers (46%) and third-party financial advisors (47%) are the resources employers rely on the most when educating employees about retirement planning.² For those that use recordkeepers, the cost of this service may already be covered — but a conflict of interest can arise if representatives are incentivized to recommend proprietary resources. The trade-off with third-party financial advisors is typically the advantage of impartiality in exchange for paying a fee. Internal staff can be cost-effective, but only if they’re well-qualified. In this case, there’s an important need to consider liability because a strict set of rules applies to retirement-related advice.

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Financial benefits for improving employee wellbeing
More than one-quarter (28%) of employers have a formal financial wellbeing program in place — a number that’s projected to grow. As a sign of recent momentum, most offer employees at least one ad hoc tool or other opportunity for improving their financial knowledge and wellbeing. Typically these resources include paper statements (50%), one-to-one onsite meetings (53%), phone support (57%) and onsite group meetings (63%). Webinars, web and smartphone apps are offered by 40% of employers, and 30% make on-demand videos available. Educational modules accessed through technology platforms are especially appealing when there’s a need to connect with remote or hard-to-reach employees.²

These efforts have great potential to produce meaningful advantages. Research shows that employees who were repeat users of their workplace financial wellbeing programs had higher overall financial wellbeing, were better prepared for retirement, managed their cash flow more effectively and were more comfortable with their debt levels.³

Tools for managing the high costs of higher education
Newer options for supporting educational costs include student loan refinancing and pay-down plans, as well as loan program evaluation tools. Some of these benefits are configured for added financial versatility. For instance, employers that make annual contributions to employee retirement plans may allow participants to redirect those funds to a student loan repayment program. Information on products and services, such as an existing tax-advantaged 529 plan and programs geared toward lowering student debt, helps relieve parents’ stress about educational expenses.

Asset protection as a form of employee protection 

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It’s up to employers to do their best to help their workforce fully grasp the extent of their benefits and the support they provide. Employees need to know how to maximize all options and understand what costs may not be covered by disability or health insurance.

The onset of a life event like a disability or serious medical diagnosis isn’t an ideal time for an employee to realize they’re unprepared. Too often, the cost of treatment for cancer or a heart attack wipes out savings, forcing the employee to pay with an early 401(k) distribution, credit cards or other last-resort fallbacks.

Employers are increasingly adding benefit options to help offset employees’ monetary burden. In 2018, the availability of coverage increased by 6 percentage points for both accidental death and dismemberment (86%) and critical illness (47%). Insurance against other exorbitant healthcare expenses include cancer (42%) and hospital indemnity (34%).⁴ Still, just offering these additional voluntary options isn’t enough. Education on the safety net they provide is essential to increasing the likelihood of employee election. Employees need to understand how voluntary insurance coverage and discounted support services create risk protection — and stretch the value of their earnings.

Maximizing the value of an affordable future

The highest possible organizational ROI from employee financial education is realized when employers: 1) minimize cost by taking an inventory of paid resources they already have, and 2) set and follow a clear goal for communicating the value of these benefits.

Take an inventory of paid resources to minimize cost

Often, financial education resources are already part of core programs like employee assistance programs and health plans. And many providers are introducing new tools — packaged as value-adds with no or low additional costs — for helping employees manage debt, budget more effectively and repay student loans. It’s important to take advantage of multiple tools and technology advances for evaluating the workforce and expanding employee communication touchpoints.

Establish a clear communication goal

Education is a powerful change agent that succeeds on the effectiveness of employee communication. To resonate with the workforce, messages need to closely align with the interests of a given population. The concept of wealth management is an appropriate hook for some employees, while others more    strongly connect with the opportunity to reduce stress by meeting their immediate financial obligations.

For any audience, it’s important to underscore the lasting value of financial education and voluntary programs. Relatively low, temporary expenses are easier for employees to justify when they see they’re making choices and developing skills that are ongoing investments in their greater financial wellbeing.

This article is an excerpt from our 2019 Organizational Wellbeing & Talent Insights Report – U.S. Edition. 


Dean Clune
National Practice Leader, Retirement Plan Consulting

Dean and his team manage both the risk and benefit of clients’ retirement plans. For the past 10 years, Dean has focused on investments, fiduciary liability, financial wellbeing and plan design for defined contribution plans. He understands how to navigate the ever-changing world of retirement, and helps employers and their employees achieve favorable retirement outcomes.

Terri Orem
Divisional Vice President, Voluntary Benefits Consulting

Terri leads the voluntary benefits national service team. Her expertise in voluntary benefits marketing, sales and service provides a supportive foundation that guides her team in securing best-in-class benefit and service solutions for clients. The team also manages the implementation and service of voluntary programs.


¹Career Builder, “Living Paycheck to Paycheck is a Way of Life for Majority of U.S. Workers,” 2017
²Arthur J. Gallagher & Co., “2018 Retirement Pulse Survey,” May 2019
³Forbes, “The 6 Best Ways To Use Your Financial Wellness Benefit At Work,” April 2017
4Arthur J. Gallagher & Co., “2018 Benefits Strategy & Benchmarking Survey,” November 2018