The whole definition has changed within the past 10 years, said Dorothy Miraglia-King, strategic benefits consulting expert and executive vice president at Engage LLC, a company that provides HR solutions for small and mid-sized businesses. Ten years ago, financial wellness meant retirement savings. But the idea of what retirement looks like has changed dramatically in the past decade. It's not as realistic for people to retire at 65 anymore, for example. People are living and working longer. What about all the life that happens before retirement that requires financial health?
Another dramatic change? The multigenerational workforce: baby boomers, millennials, Gen X and Gen Y, all working together.
I recently wrote about how, at the basic level, employees in every generation want the same thing. They're interested in the same benefits and life-long financial goals. However, they're at different steps in obtaining those goals. Their immediate financial needs are dependent on where they are in life. Based on these more short-term differences, I spoke with Miraglia-King about how a company can develop a successful financial wellness program.
The first step, she said, is to create a measurable objective. For example, “I want employees to understand their 401(k)s better.”
Financial health objectives may be dependent on the employee demographic. One company's workforce is not the same as the other. A millennial who needs to learn how to manage credit card debt or how to acquire a mortgage or how to put together a financial plan has a different objective than someone in their 50's who's figuring out if they can retire in 10 years.
The employer has to ask, “What do my employees look like?” when defining financial health.
In general, millennials may be interested in things like paying off student debt and managing basic living expenses. Also: balancing a checking account. This is one example of a financial skill that certain generations never learned because of how quickly technology took over everything.
“You'd be surprised at how little people know about balancing a checking account,” Miraglia-King said. “We don't use paper anymore, so balancing a checkbook is a skill that's gone away. A financial wellness objective could be learning how to manage money online.”
Once the employer has developed the need (the objective), Miraglia-King said, they should develop the communications strategy that identifies the audience and looks at method of delivery. How do employees prefer to get their information? Something electronic or written? In an email campaign or through access to an adviser? Maybe a weekend workshop?
Employers should also consider how will they measure what's occurring and what changes happen as a result of the initiative. They could, for example, use a survey at the beginning and the end to see if they've met the objectives.
This should be a continuous process: Financial well-being, like physical and mental well-being, is something that needs to be constantly worked on and improved. There's no easy fix. As employees age or face different hurdles in their lives, there'll be something new to learn.
One final topic we spoke about in creating an effective financial wellness program: the importance of having high-level support.
“Lead by example,” Miraglia-King said. “Your upper management must set the tone for any campaign you do, and financial wellness is no exception.”
Andie Burjek is a Workforce associate editor. Comment below, or email at aburjek@humancapitalmedia.com. Follow Workforce on Twitter at @workforcenews.
Tags: Engage PEO, financial wellness, leadership
The post Developing an Effective Financial Wellness Strategy appeared first on Workforce Magazine.
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