Going Beyond Financial Literacy: Why financial courage is the key to employee financial wellness

Transcription

1 Going Beyond Financial Literacy: Why financial courage is the key to employee financial wellness Renée McGowan Global Leader, Individual Retirement Savings & Wellness Betsy Dill Senior Partner, US Financial Wellness

2 Employees juggle financial pressures Entertainment Gifts Phone bills Mortgage / Rent Caring for kids 401(k) Caring for parents Cable TV 529s Kids activities HSA Healthcare costs Vacation Taxes Unplanned expenses Credit Cards Utilities Donations Home maintenance Transportation costs Gym membership Groceries Student loans CDHP

3 Employer benefits and personal finance decisions The line between these is blurring Y E S T E R D AY T O D AY E M P L O Y E E E M P L O Y E E E M P L O Y E R E M P L O Y E R

4 Inside Employees Minds Higher financial courage leads to higher engagement, which leads to higher financial wellness. Hours per month worrying about money while at work: 5 (median) 13 (average) Employees who have access to financial wellness programs report higher levels of trust and satisfaction with their employer Actual financial literacy did NOT show a strong correlation to financial wellness. Perceived financial literacy was a better predictor. 52% would find a $400 unforeseen expense difficult to cover (but would manage) or a major crisis.

5 Why should employers care? HIGHER EMPLOYEE ENGAGEMENT Employers offering financial wellness solutions to their employees have 22% more employees who are extremely or very engaged in the workplace, resulting in higher levels of productivity and retention 1 IMPROVE PRODUCTIVITY Employees with greater financial wellness and courage are 2.3% more productive at work 2 IMPROVE ROI ON BENEFIT SPEND Financial wellness programs increase the visibility of employer benefits, resulting in increased utilization and appreciation, increasing the ROI of benefits spend 3 ATTRACT AND RETAIN TALENT 71% of employees say they are more likely to stay with their employer if it offers a good benefits package 4

6 What s the financial impact? 4.5% of payroll dollars are wasted on employees spending time on the job worrying about money

7 So what does a Financial Wellness program look like? Holistic Personalized Leverages Data for Insights Utilizes Technology

8 Key finding: the importance of Financial Courage Defined as having comfort and confidence when tackling financial issues Low Financial Courage High Financial Courage GREG O v e r w h e l m e d a n d s c a r e d a b o u t h i s f i n a n c e s C o n f u s e d e. g. a s s e m b l i n g a d e s k w i t h p a r t s a n d h e d o e s n t h a v e a s c r e w d r i v e r F e a r f u l a b o u t g e t t i n g r i p p e d o f f o r l o s i n g m o n e y S c a r e d o f e m b a r r a s s i n g h i m s e l f d u e t o h i s l a c k o f k n o w l e d g e / e x p e r t i s e ( w o u l d r a t h e r b e O s t r i c h w i t h h e a d i n t h e s a n d ) A N N A H a s a g o o d s e n s e o f h o w t o m a k e t r a d e - o f f s w i t h h e r f i n a n c e s Ta k i n g s t e p s a n d f e e l i n g l i k e s h e s p r o g r e s s i n g h e r f i n a n c i a l s i t u a t i o n m a k i n g e n d s m e e t, s a v i n g F e e l s s h e h a s a h a n d l e o n b a s i c s t h i n g s s h e n e e d s t o d o a n d i s n t a f r a i d t o d o t h e m e. g. g e t t i n g r e g u l a r p h y s i c a l s P e r i o d i c a l l y e v a l u a t e s h e r o w n s i t u a t i o n and a d j u s t s a c c o r d i n g l y

9 How do these programs make a difference? EMPLOYER OFFERS FINANCIAL WELLNESS PROGRAM Step 1 Awareness Step 2 Participation Step 3 Guidance Step 4 Action HIGH Financial Courage LOW Financial Courage Financial courage is KEY for these initial steps Financial courage doesn t seem to matter once you get to later steps

10 Get started on Financial Wellness: 4 ideas

11 Get started on Financial Wellness: 4 ideas

12 Get started on Financial Wellness: 4 ideas

13 Get started on Financial Wellness: 4 ideas

14 What s your financial wellness journey? M a k e S a v i n g A c h i e v a b l e D e f i n e S u c c e s s E n c o u r a g e C o n t r i b u t i o n s B u i l d N e w O p p o r t u n i t i e s Financial Courage informs all aspects of strategy L E T S D R I V E T H E C O N V E R S A T I O N A R O U N D F I N A N C I A L F I T N E S S

15 Questions? Renée McGowan Global Leader, Individual Retirement Savings & Financial Wellness Betsy Dill US Financial Wellness Leader