Picture this: John, one of your most talented junior managers, has had a number of life changes recently, both happy and challenging. He’s gotten married, moved into a new condo, and has started caring for an aging relative. He’s got a lot on his plate, personally, professionally, and financially.
Fast forward a year: John has been struggling to keep up with the bills and has been distracted at work thinking about how to cover those costs. All of this has led to a stress-related medical condition causing additional medical costs and more time out of the office, and has John worrying about how he can both make ends meet and save for retirement. John would like help, but is worried about how others will view him.
He's certainly not alone.
We surveyed 5,000 employees in the U.S. and found that nearly half are living paycheck to paycheck. And those struggling financially did indeed have:
- Lower productivity
- More absences from work
- Poorer health
- Higher expectations to work past age 70 while feeling “stuck” in their current job
All of these can lead to real costs for an employer. So what can your organization do?
One powerful and popular idea is to provide financial planning technologies that address short-term and long-term financial needs. More than 50% of employers say this is something already in place or planned over the next 2 years.
The question then becomes: which tool? How do I evaluate available options?
To help, we have put together a list of best practices to keep in mind when looking for the perfect solutions. They are proven to improve the effectiveness of a financial wellness tool, and help prevent your employees from becoming financially stressed like John.
- Remember “Nudge me, don’t judge me.”
Employees don’t want to see large red text telling them what they are doing wrong. Instead, provide useful information, without judgment, and let employees decide for themselves whether they are meeting their personal financial goals.
- Respect user trust, which is tricky to nurture, especially across socioeconomic/cultural differences.
Would you upload your personal financial information to a tool without seeing what it is doing with that information first? I wouldn’t. Tools that require users to input their personal finances before showing any value are not getting the job done.
- Convey benevolence and reciprocity, which are essential to nurturing trust
Research shows that if you do something for me first, I am much more likely to engage. Reciprocity is a powerful principle, and providing upfront value will intrigue your employees, who will want to learn more. For example, provide something intuitive and tangible like the age at which you can retire, based on information pre-populated in the tool. This “warm introduction” would smooth users entering the tool, who could then update their personal information, change their 401(k) deferrals or make other changes to see the impact on this age.
- Add value through in-the-moment decision support
No two employees are alike. Some are building families while others are preparing for retirement. Some are focused on tax efficiency while others are drowning in credit card debt. Big decisions, with long-lasting financial consequences, or often made in an instant. It’s important to have a tool that meets employees where they are.
- Provide personalized suggestions, not personalized messages
No one likes that incoming call over dinner reminding you to maximize your 401(k) match. But personalized suggestions when doing online shopping? Of course! That is standard. A tool that nudges you based on what it knows will not only improve the user experience, it will also drastically improve outcomes.
- Use social-enabled metrics to overcome the taboo of talking about finances.
The last thing you are likely to hear at a dinner party is your friend telling you how much they have in their savings account or how much they owe on their mortgage. Finding a tool with a metric that puts financial health in terms you can talk about around the water cooler will stimulate a little healthy competition and help use social pressure for good!
- Carefully screen product bias to improve value and reduce negative user experience
Many financial wellness tools sell either products or ads on their site. No one likes being sold to, and it’s not surprising that these tools often suffer from very low utilization.
Plus, it’s important to make sure any sponsorship of these solutions is in the best interest of your employees. Is the tool only promoting their own product? Or will they promote your full suite of financial wellness offerings?
A financial wellness solution that follows these principles will increase both utilization and effectiveness. Willis Towers Watson’s myFiTage, designed around these emerging best practices, is seeing 40% annual usage across a wide variety of employees and is proven to lead to true behavior change. Check out the myFiTage page HERE for more information or to schedule a free demo.
Lauren Hoeck is a director in Willis Towers Watson’s Washington, DC retirement practice. She champions financial well-being and retirement readiness, including measurement techniques, strategy design and solutions, and consults with a wide range of clients on the topic. Outside of work, Lauren loves spending time with her two boys, films that challenge her thinking and skiing in powder.
Lindsay Meadows is an Associate Director at Willis Towers Watson’s retirement practice in Washington, D.C.. She specializes in helping clients align financial wellness and retirement benefit strategies with the unique objectives of each organization. Outside of work, Lindsay enjoys to read and do home improvement projects.