Financial wellness programs fail for this reason
Let us explain.
Hi Friends,
This week, we’re continuing our look at 2024 Financial Wellness Stats.
In our first email in the series, we discussed the importance of focusing on financial health in the workplace. In our second, we discussed the financial topics that are surprisingly the most intimidating. (Missed either one? Drop a comment below and we’ll send it to you.)
Today we’re diving into the fact that so many financial wellness programs are falling short.
Here’s a typical scenario with an employee.
We’ll call her “Sarah.”
Sarah is an account executive at an ad agency where she pours her creativity into crafting campaigns that wow her clients. She works long hours, juggling tight deadlines and high expectations, but her passion for the job keeps her going. In her quieter moments, she dreams of the day she can retire and spend her time relaxing on a beautiful beach.
One day, her employer introduces a new financial wellness program offered through their 401(k) provider. Excited about this opportunity, Sarah signs up right away.
Weeks go by, Sarah starts to engage using the link to a library of videos but after a few brief sessions she stops. It is not clear why, but it just somehow falls off her radar. She may get a few automated reminders that she intends to circle back to, but does not. The money she is putting into the 401(k) goes uninvested and she misses out on gains that compound over time.
If, for example, Sarah had put $10,000 into an S&P index fund 10 years ago, and reinvested the dividends, that $10,000 would have grown to about $27,750, based on an annualized return of around 10.8% over that 10 year period. That’s not even including possible company matching funds!
Sarah’s story isn’t unique. In fact, it reflects a broader issue that many organizations face with their financial wellness programs. While the intention to provide valuable resources is there, the actual impact often falls short.
What’s the problem with most programs?
Forbes recently published stats from a new Cerulli Associates report stating that 71% of 401(k) plan sponsors have adopted financial wellness programs. So we know more companies recognize the importance of financial wellness programs in the workplace.
However, the report also reveals a disappointing fact: most financial wellness products and services have usage rates below 20%.
Why does this gap exist? Why are so many programs falling short? 🧐
These financial wellness programs often struggle with three main issues:
Lack of Personalization: Many programs offer generic advice that doesn’t address the specific needs of different employees.
Limited Interactivity: Instead of engaging participants, some programs provide static resources that fail to inspire action.
Accessibility Challenges: Employees might find it difficult to access or navigate the resources provided, leading to low engagement.
A better approach
How can financial wellness programs be transformed to bridge this gap and truly support employees like Sarah?
Interactive, Personalized, and Accessible solutions are key to success.
At Financial Wellness Strategies, our in-person workshops and virtual group Q&A sessions are engaging—and fun! And because our programs are LIVE, they’re interactive, personalized and accessible. They feel like self-care and a fun break from the work day rather than another stressful “to-do.”
We’d love to tell you more. Reach out today to chat, or put us in touch with your HR Leader or Employee Resource Group.
Are you ready to try a financial wellness program that truly makes a difference?
Let’s get started.
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