Why Employers Are Offering Financial Wellness Programs

PHOTO: Financial wellness programs are being offered by several companies to provide employees various levels of financial education in the workplace.Getty Images/Hero Images
Financial wellness programs are being offered by several companies to provide employees various levels of financial education in the workplace.

You already know your boss wants to help you lose weight and improve your vital signs, through one of the workplace wellness programs that more than 90 percent of big employers now offer. Now are you ready for the new kind of wellness in the workplace?

Bank of America, Capital One, J.P. Morgan Chase and Wells Fargo are among the big banks looking into offering various levels of workplace financial education. All of these financial firms appear to be responding to demand. According to a recent Harris poll, 86 percent of employees surveyed said it was “important for employers to offer financial wellness programs.” And 93 percent of big employers want to do more to help their employees understand their finances, according to an Aon Hewitt study.

Perhaps no company has banked — pardon the pun — on this concept more than McGraw-Hill Federal Credit Union of New York. The credit union started offering what it calls “Financial Wellness in the Workplace” sessions at a medium-sized company in the New York/New Jersey area earlier this year. The program goes beyond just offering information about the company 401k; it delves into credit, debt, home-buying, budgeting and so on.

“Folks are clamoring for this and they just don’t know where to find it,” said Shawn Gilfedder, president and CEO of McGraw-Hill Federal Credit Union. “We do think the niche here is the workplace environment. If you ask the employees if they’d pay a sum of money to have that opportunity individually, they would say no. But if it’s offered in the workplace, they’re happy to participate.”

In a report for the FINRA Investor Education Foundation, the educational arm of FINRA that regulates financial advisers, Professor Robert Clark of North Carolina State University examined financial wellness programs offered by nine different employers and found that they made an effort to offer useful information that was not biased or commercial. Better yet, he found that “workers who participate in the retirement planning seminars significantly increase their level of financial literacy and…many workers alter their retirement plans.” Many did things like delay their retirement after realizing they didn’t have enough money saved.

In the McGraw-Hill Credit Union program, employees first participate in “lunch and learn” sessions on topics like protecting your identity, understanding your credit score and better budgeting. About 300 employees attend in person, others remotely. McGraw-Hill Credit Union facilitators have watched in amazement as coworkers share and commiserate about financial topics that are normally private, or even taboo.

Still, studies show, only about 10 percent of people who participate in brief financial seminars will act upon what they learn. In an effort to address this, the McGraw-Hill Federal Credit Union Program offers people “Lifecycle Labs.” These are colorful touch screen computers that help participants create a visual timeline with goals like throwing a wedding, buying a car or a home, paying for their children’s college tuition and then their own eventual retirement.

"It’s a way to get them to vest in the process,” Gilfedder said. The final, most personalized, layer of the McGraw Hill Credit Union program gives employees a chance to meet with the credit union’s certified financial planner. And it’s all paid for by their boss.

So why would a company do it? First, it’s not necessarily expensive for employers to offer these programs. According to a report by the Consumer Financial Protection Bureau, it costs private employers only about $144 per worker annually. Other studies have shown employers benefit from their investment, because their workers feel valued and are less financially stressed.

Gilfedder of McGraw Hill Federal Credit Union puts it this way: “Financial stress is still at the top of people’s worry list. And I can tell you, 90 percent of the time, people are addressing that stress at work. Guess what? They’re sitting at their desk to do their banking while they’re at the office. Reducing that stress helps them be more productive and should make them a better employee.”

Elisabeth Leamy is a 20-year consumer advocate for programs such as "Good Morning America" and "The Dr. Oz Show." She is the author of Save BIG and The Savvy Consumer. Elisabeth is also a professional speaker, delivering talks nationwide on saving money, media relations, and career success.

Any opinions expressed in this column are solely those of the author.