A new way to think about financial wellness at work

TOGETHER WITH

Save for the big stuff. Vestwell helps businesses of all sizes make saving simpler for their employees—whether that’s retirement, an emergency fund, or their kids’ education. The result: employers who lead on financial wellness and employees who feel more ready for whatever comes next.

On Sept. 17 at HR Brew’s Total Rewards Equation event in New York City, HR leaders gathered to take a closer look at their compensation and benefits strategy—what programs are working, what employees are thinking, and where their organizations are seeing the biggest payoff.

In one of many insightful conversations, Vestwell VP and Head of Strategic Retirement Consulting Kevin Gaston sat down with Franklin Templeton Head of US and Global Strategic Marketing Jacquelyn Reardon to discuss new research from Vestwell and Franklin Templeton.

We’re here to give you a rundown of their segment, What Workers Want: The Latest Insights on Financial Wellness and Employee Benefits.

Here are some key takeaways from their conversation.

Under pressure

Today’s workforce is under a ton of financial pressure. According to Franklin Templeton and Vestwell’s research, 72% of workers say job security matters more than a higher salary. And 63% report that day-to-day expenses prevent them from saving more for retirement.

That’s because concerns about expenses and a person’s ability to save do not disappear at higher incomes, Gaston revealed. Gaston reports seeing that number continuing well past $200k in income, revealing that this lack of security isn’t an early-career issue.

Gaston further emphasized this, saying, “Job security is not a function of savings.” It’s a helpful reminder that employees are full, holistic human beings with lots of concerns. Reardon agreed with his point and added that HR professionals should work with their people to find out what their priorities are.

Different people have different ideas of what it means to be financially independent, which is why Reardon recommends scaling out personalization when it comes to compensation and benefits.

Rising costs

For employers, your budgets are increasing, but so is the complexity. Franklin Templeton and Vestwell’s research found that 81% of employers say their benefits budget will need to increase significantly in the next 12 months.

That’s why Gaston emphasized that employers need to ask themselves, “How do you figure out what works for your demographic?” The answer Reardon proposed is surveys. Surveys help you get to the core of your unique employee base since employers are increasingly being asked to do more and more with much, much less.

Reardon also emphasized the difference between employees knowing a benefit exists and actually understanding or using it. Using pet insurance as an example, Reardon explained that low utilization may signal an education gap rather than a lack of interest. By prioritizing their most valuable benefits and communicating them clearly, employers can help employees make better use of what is already available.

More clarity

Franklin Templeton and Vestwell’s research showed that employees are looking for more clarity, with 88% of workers reporting they want benefits explained in plain language. The problem? Only 12% report turning to their employer’s benefits or HR platform for financial guidance.

Reardon says that employees are finally making a commitment to lean in and are recognizing more and more that employers are doing a lot, which means they need to do some work, too. She nudged employers to ask themselves how they can make their benefits understandable in plain language and proposed a solution: Scale out that process using technology and AI to encourage engagement.

Gaston focused on the “open enrollment cliff” in his response, which he described as the pressure employees feel to become experts on all their benefits in two weeks, determine the right benefits for themselves, execute their choices, and be locked into those choices for the next year.

That’s why he prompted employers to take a different approach. Gaston recommended that it might make sense to bring up one—yes, just one—topic at a time, before open enrollment begins, to keep that topic top of mind. That way, employees can get the information they need in a way that works better for them.

Always personalize

Gaston and Reardon ended their conversation by circling back to something they mentioned at the very beginning: personalization. That’s because it’s exactly what your people want. According to their research, 91% of respondents are interested in a more personalized 401(k) investment option.

People are more okay with sharing things about themselves for personalized recommendations and advice, Reardon pointed out. Gaston added that employers could frame this personalization in terms of financial goals. After all, just telling your people to save 10% isn’t enough. They want to know where they should put that 10% and for what purpose.

Technology and AI can help a lot with personalization—through quizzes, tools, and chatbots. Reardon points out one specific way chatbots can really help when it comes to financial matters, because people can feel nervous or embarrassed to ask questions. If you can get them a majority of the way with a chatbot before connecting them with a human advisor, it helps them feel less embarrassed.

Gaston described this struggle within employees by framing it as a question: “How can I ask my employer this in a way that sounds like I’m smart?” Using a combination of technology and human resources helps your people get the answers and the help they need.

Think you know what your employees actually want? Take a look at Vestwell’s most recent report to see where employee expectations and employer offerings aren’t quite lining up—and learn what it takes to bridge that gap.