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Employees are increasingly seeking jobs that offer enhanced levels of financial support and stability. Our most recent industry survey found that 77% of respondents are worried about money and that financial stress negatively impacts their daily productivity at work. A WTW research report found that 88% of employees are concerned about their ability to meet basic costs of living, and that 66% of respondents said they want financial wellness support and resources from their employers.
The demand for employer-sponsored financial benefits is high, but most employers are not prioritizing financial wellness in their benefits package: Fewer than one in four (23%) of employers ranked financial well-being as a top priority for their benefits programs. One reason why many organizations are hesitant to offer these benefits is because they aren’t sure how to measure the long-term impact of these programs.
Sinking capital into a program that seems unproven can feel like a risk, but there are a number of ways to measure the long-term effectiveness of a financial wellness program. Here’s how to get started.
A financial wellness program is a system designed to help employees manage their money effectively. These programs are designed to give employees more control over their finances, reduce some of their stress over money, and allow them to successfully plan ahead.
Retirement planning is one important component of financial health, but a robust financial wellness program should also include financial education and coaching, budgeting resources, debt management assistance, emergency savings plans, tuition assistance or reimbursement, credit score building and monitoring, and other elements.
Most employees in today’s workforce are worried about their finances, and that stress becomes more pronounced as employees approach retirement. A SoFi report found that nearly two-thirds of employees felt they were unprepared to handle a major emergency expense, and 45% of employees are stressed about not having enough money saved for retirement. These two concerns are related: The number of employees who took a hardship withdrawal from their long-term retirement plans tripled between 2018 and 2023.
When employees are stressed about their finances, they’re not only less focused at work; they’re also less loyal to their current employer, more likely to be seeking a new job, and less likely to recommend their current workplace to friends and family members. Providing financial wellness resources is one critical way that employers can help combat these ripple effects of financial stress in the workforce.
Short-term metrics are measurements that can be taken quickly, such as program participation rates or tracking changes in financial behaviors. These metrics are most valuable when measured regularly over a long period of time. Short-term metrics are not sufficient for measuring long-term success if they are measured only once (or sporadically) because they provide only a single close-up snapshot of financial wellbeing instead of a high-level view.
For example, measuring program participation rates can be useful when done over time but are not indicative of program success if documented once. Tracking the employee participation rate in an emergency savings account (ESA) immediately after it’s been introduced will show how many employees decided to enroll right away — and that’s about it.
Measuring the amount of money saved in a workplace ESA is another short-term metric that can be useful when tracked over time but misleading if done just once. If employees are encouraged to save $20 from each paycheck in their workplace ESA, and savings account balances are measured only once at the launch of the program, then employers could expect to see an average savings account balance of $20 or less. But if employers decide to check the average workplace ESA balance twice a year, the average amount saved will be closer to $500 after six months and $1,000 after one year.
Quantifying the long-term success and sustainability of a financial wellness program requires more work, but it is significantly more valuable for understanding program effectiveness. Tracking program participation over time is one metric to assess, and it’s also important to track financial health improvements, including the average amount saved for emergencies or for retirement, debt levels, and early hardship withdrawals from long-term savings accounts.
Monitoring long-term changes in financial literacy and behaviors is another way to assess a financial wellness program’s effectiveness. Asking employees questions about their financial literacy in surveys gives them the opportunity to self-report on their ability to build and follow a budget, or to share their level of comfort in making investment decisions. Anecdotal information collected from supervisors or managers can also provide insight into program impact, especially when the anecdotes are documented and tracked over time.
Employers can collect data on employee performance and productivity, such as job performance, absenteeism, and even health benefits claims for stress-related illnesses. When measured in tandem with more obvious financial wellness indicators (such as early hardship withdrawals or savings account balances), these data points can provide even more context around whether the financial benefits package is actually working to reduce money-related stress and improve productivity and performance at work.
Employee retention and overall satisfaction with their current organization is another key long-term metric to examine. Low employee turnover and high levels of employee satisfaction can demonstrate that employees feel supported by their organization, as well as show their levels of loyalty and commitment to their current job. This can be an indication that financial wellbeing efforts are bearing fruit.
Measuring long-term financial wellness effectively isn’t inherently more difficult than measuring for short-term impact, but it does require more consistency and thought. Integrating qualitative as well as quantitative measurements can be useful for understanding why a particular program is working, where employees find the most value in their benefits, and how employers might be able to increase participation rates or improve financial literacy efforts.
Financial health assessments and scoring, when tracked and evaluated over time, can show how implementing financial wellness benefits has affected financial literacy and financial behaviors among employees. Measuring financial health through assessments and scoring before you’ve added any financial wellness benefits to the package can offer a “before and after” view of how focusing on financial wellbeing has impacted employees.
Longitudinal studies are another long-term metric that can offer valuable insight to organizations. A longitudinal study follows the same group of people over an extended period of time — for years, if possible — and consistently collects feedback and data from this group. This allows companies to track changes at both individual and group levels, establishing a pattern or sequence of behaviors or attitudes.
Follow-up surveys are questionnaires deployed after an initial interaction or event to track progress, gather more feedback, or assess satisfaction levels. They can be used in tandem with longitudinal studies, in between annual employee satisfaction surveys, or anytime updated data or information is desired.
Case studies and success stories can showcase how financial wellness benefits have affected single individuals or small groups as opposed to the entire workforce. A series of success stories about how employees who used a workplace ESA were able to save more in their long-term retirement accounts over time might be collated into a single case study. These can be shared with employees to encourage participation as well as offer granular feedback about the specifics of program effectiveness.
Integrating financial wellness data with other HR metrics, such as absenteeism and turnover rates, can be another way to keep tabs on long-term financial wellness improvements. When evaluated in tandem with other long-term measurements (such as financial health assessments or longitudinal studies,, patterns such as lower rates of absenteeism or lower turnover rates can often be at least partially attributed to financial wellness program benefits.
After determining which financial wellness programs to include as part of a comprehensive benefits package and deciding which measurement methodologies will work best, implementing these best practices can ensure that the long-term metrics generate useful, actionable, and reliable data.
One of the most critical steps is to set realistic and meaningful long-term goals. Expecting that every employee will participate in a voluntary program (a 100% participation rate) is an example of an unrealistic long-term goal; there will almost certainly be a portion of the workforce that chooses to opt out of any financial wellness benefit if it’s not mandated. Setting a goal for employees to save $10,000 in their workplace ESA is unrealistic as well as not meaningful because depending on their current financial circumstances and their other expenses, many employees will want to save less than that amount (and some might want to save more). Aiming for 50% of employees to enroll in a voluntary workplace ESA after one year, and for enrolled employees to have saved at least $500 in those accounts, are examples of more realistic and meaningful goals to set.
After launching a new employee financial wellness benefit, it’s important to continue to engage employees and maintain participation. There are many reasons why employees might not immediately enroll in a new voluntary benefit. Maintaining consistent communications through multiple channels about available financial wellness benefits and how to access them provides continuous engagement and education opportunities beyond the benefit launch.
Financial wellness benefits programs should also grow and change with the workforce. Collecting ongoing feedback and data from employees about what they like (and dislike) about the program, what they might want to see in future iterations, and how it’s helping them can give organizations a road map for continuing to update and evolve the program.
Employee benefits are one of the most effective ways that organizations can support staff members, retain the most productive workers, and attract talented newcomers to the company. Financial wellness benefits (such as retirement savings plans) have long been a popular part of benefits packages, and today there are a wealth of financial programs available that can differentiate employers from their industry competitors for talent.
Investing in a financial wellness program for employees can be one of the most effective and rewarding ways that organizations can supplement their benefits offerings. Using long-term metrics to fully evaluate the impact of these programs helps companies understand which programs are having the greatest effect, how to improve them, and what benefits to add next. Long-term metrics can provide deep insight into employee productivity, loyalty, and stress levels, all of which give organizations an edge when it comes to recruiting, retention, and maintaining employee satisfaction.