When do employees most need financial advice? In moments that matter, like what we’ve been experiencing with the global COVID-19 outbreak and recent market volatility.
The market swings of the past month have created anxiety for all investors. With financial concerns being the No. 1 workplace stressor, the decline in 401(k) balances and company stock prices have only exacerbated the unease of our colleagues.
In fact, managing extreme market volatility is just one of the moments that matter in the life of an employee. These also include marriage, the birth of a child, the purchase of a home and big educational expenses, not to mention a health issue or death in the family. More than that, providing guidance and answers to employees at critical moments is an opportunity to form a closer bond with your team.
What Is ‘Financial Wellness’?
Because financial wellness is often confused with financial education or 401(k) plan calculators, it’s important to define what it means. In my view as someone working in this space, holistic financial wellness sponsored by an employer offers comprehensive personal financial management. Importantly, it factors in the financial contributions of your company’s employee benefit program and an employee’s own personal assumptions and situation.
The journey to financial wellness begins with goals-based planning, which, in turn, directs all of an individual’s budgeting, investing, debt management, estate planning and insurance needs. Employees are empowered to see the big picture and take charge of every aspect of their personal finances. Financial education is also part of the program, but it is only one part of the solution.
The Hybrid Model
So what should employers do? Offer a financial wellness program that includes advice from both an experienced advisor who has been through multiple market cycles and a digital platform that gives employees 24/7 access to their financial position and long-term financial plan. My company offers one such platform, but there are a variety of other providers, which is why it’s important to research and find one that fits your company’s specific needs.
For employers, the technology component in the hybrid financial wellness model is essential. Employers should incorporate tech that can collect metrics and insights on a mass scale to understand the behavior and needs of employees. Without a digital component, it would be difficult for human advisors to serve a workforce of 5,000 or 50,000. It’s also important to make sure the digital element allows employees to easily build a personalized plan with a wide array of financial planning functionality that complements the work of human advisors focused on more complex matters.
When implemented effectively, the hybrid model benefits employers through increased employee loyalty, an advantage in recruiting and employee retention, and a more motivated and empowered workforce.
Moments That Matter: Market Volatility
Over the past month, our company has seen a number of tangible examples in which this hybrid approach to financial wellness has calmed worried employees. From the digital side, employees could see what these wild market swings meant to their goals, while also receiving investment advice and education. Some employees then reached out to human advisors to receive advice on goals that went off-track in light of the market correction.