How much difference can an email make when it comes to employee financial wellbeing? A lot — if done right — we learn. Following is the story of an employee whose financial situation took a dramatic turn for the better after she received an email about her employer’s new financial wellness benefit. She related the story in the Employee Benefit Research Institute’s (EBRI’s) recent Financial Wellbeing Research Center Symposium. Lessons we can all learn from her experience are:
A catalyst is often the key. As she explained: “At the beginning of the year, my employer offered a benefit to improve employees’ financial wellbeing. I had recently divorced, and it caused some financial hiccups in my life. So, when I got an email from my employer about this financial wellness benefit, it was a great opportunity for me to better myself financially.”
Even baby steps can start the long journey. She notes: “I went to the financial wellness website, and I was looking at some of the useful tools they had. Regarding reducing debt, it indicated that I should contact my creditors. And I did that. I reached out to the credit card companies I have, and I was able to reduce my rates from 24.99 percent to 19.99 percent on one of them; the other one was reduced from 22.99 percent to 17.99 percent. That’s when I thought: ‘I can do better than this.’”
Small successes build on one another. She goes on: “I contacted my bank to see if there’s something I could do to consolidate the debt I had acquired. They were able to get me a loan to consolidate the debt down to a 9.99 percent interest rate. The debt reduction module also indicated that I should check with my insurance companies and see about other ways of reducing costs. I reached out to several auto and homeowners insurance companies in the area, and I was able to change my insurance and overall have a savings of close to $1,400 between the auto and the home insurance. I was just totally shocked just seeing what I could do on my own. It was amazing. And that was just using the tool. I hadn’t even reached out to a financial coach yet.”
Gaining confidence and trust is crucial. She stresses: “I was really impressed with what I experienced so far. I sat in on a session where they talked about having too much stuff in your house. You know, what you could do to get your home organized a little bit better such as having a garage sale or donating things. So not only am I doing better financially, but I have a better outlook on life.
Eventually, I spoke to a financial coach. He was able to help me with my retirement fund, my emergency funds, and giving me a better perspective on my financial situation. All of that was done just by looking at the website, the sessions, and then talking to the coaches. Now I have a sense of relief of what I can do financially, on my own.”
The employer can play an important role. She observed: “My employer was definitely a key ingredient. I would have never gone out on my own to look for financial advice. When my divorce was finalized, I did speak to my banking representative about things I can do on my own and how to start getting myself financially savvy as a single person again. But the involvement of our payroll benefits person in sending the email that had the link to the financial wellbeing website was important to me. She is a key motivator: She talked about it a lot and got us going. Also, for us it was a free service from our employer.”
Employees want more than just retirement help. She concluded: “One of the tools on the website even addressed student loan debt, which is awesome. Employers should not only focus on financial stability when it comes to retirement but other key points such as debt. It’s not just financial security for older age but peace of mind for all generations in the work force. I have a sense of a relief because now I have money in my pocket. I’m not living paycheck to paycheck. I was penny to penny before; now I actually have money left over, which helps. For young people, they may not be attuned to their finances. That is definitely something employers could motivate.”
Conclusion
EBRI’s 2021 Financial Wellbeing Employer Survey showed that concern for employees’ financial wellbeing is growing among employers, and as a result, they are increasing their financial wellness budgets. However, employers face certain headwinds, such as employees’ lack of understanding of how these benefits work, the complexity of initiatives, and lack of interest among employees. The message from employees, however, according to the 2021 Workplace Wellness Survey, is that they believe their employer has a responsibility to make sure they are financially secure — a sentiment employers tend to share. Encouragingly, even baby steps such as a simple email can start employees on a better financial path. Small successes build on one another and allow employees to gain confidence and trust in the process. But the help cannot center only on retirement savings: Employees need assistance with financial stressors such as debt well before retirement.