Finding financial wellness

Workplace wellness programs around physical and mental health are commonplace these days. But, more recently, financial wellness has gained in popularity as the impact of employee anxiety around finances is better understood.

So, what should employers be doing? How much is too much or too little? And how can employee behaviour actually change? Canadian HR Reporter recently hosted a roundtable in Toronto, sponsored by Sun Life Financial, that delved into these questions and more.

Making an impact

Money is the number one cause of stress for most people, according to Frank Wiginton, Toronto-based financial wellness expert.

“That stress is impacting their relationships with their families, their co-workers, their eating habits, their exercise — everything. It’s impacting all these different areas,” he said.

“If we’re not dealing with it, then we’re not going to ultimately have an impact on the overall stress in our organizations.”

Financial wellness is a natural next step in the evolution of workplace wellness, said Lianne Buchanan, director of total rewards, HR, at Economical in Toronto.

“Because of the financial wellness piece being so tied to emotional stress and how you behave and behaviours in the workplace, this is a natural evolution of holistic well-being in the workplace. And financial literacy, financial well-being, is a really important part of that.”

And financial wellness programs have been found to have a positive impact on areas such as employee engagement, productivity and retention.

“To the extent that we can take financial wellness and marry it with discussions around total wellness to get that holistic wellness approach in the workplace is to the benefit of that employee experience, and anything that we can do to heighten that employee experience is a benefit to the employer,” said Buchanan.

Overall efficiency, reduced costs of absenteeism and turnover, and improved productivity are often cited by employers when it comes to benefit programs, said Wiginton. And they can also help with marketplace competitiveness.

“It’s not going to hit every single person, it’s not going to hit all segments, but it’s one of the most common things that’s going to have a much stronger reflection of the company on its employees and what we’re doing and what we’re trying to do. And if we can marry that with ‘What are the things, what are the behaviours that employees are having and doing that are impacting their overall effectiveness and their overall productivity’ — and it’s good for them and it’s a good thing, it’s a positive thing — why not focus on that?”

Potential obstacles

But many employees are not using the tools and resources needed to make educated decisions, said Buchanan.

“Why are we not necessarily seeing those behaviour shifts? So it’s really getting to the psychology, in a sense, behind that, and it’s about the behaviour that’s going to change those outcomes at the end of their career journey or financial wellness.”

People don’t know where to start — despite all the resources available, said Wiginton.

“They’re confused and intimidated by it; they hit a website and it’s got 47 different options and they go, ‘Ahh’ and they shut down because they’re already uncomfortable with it and intimidated by it.”

The problem lies in people’s behaviours and how they manage their day-to-day finances, he said. Many are spending anywhere from 100 per cent to 120 per cent of their income, he said, which is a big reason for their stress.

“Having a program that sits there and says, ‘OK, if you put a dollar in, we’re going to contribute a dollar more,’ they’re going back to their families and their family’s saying, ‘Well, we’re spending 110 per cent, where’s that dollar going to come from?’ And it’s going to escalate their debt and it’s going to escalate those issues... you can’t help somebody with their debt until you help them with their day-to-day spending, with their behaviour, with their finances, with their perception of their finances,” said Wiginton.

“If they have a better understanding of how they’re managing and dealing with their money, if we change how they think about their money and get them to start seeing their money in a different way, then we can start influencing the change, influencing the behaviour that can then lead to them getting rid of their debt, putting money into these savings programs and giving them the confidence to then go and sit down with that advisor… to do that.”

Privacy concerns may also be an issue, but then an employee assistance program (EAP) can help, said Heather Briant, senior vice-president of HR at Cineplex Entertainment in Toronto.

“I don’t think we should overlook the value that those EAP programs can provide and I don’t know how much as employers we’re really emphasizing the availability of them and just reminding people that they’re out there.”

Another challenge concerns the stigma of people not wanting to reveal their sore spots, said Buchanan.

“Many (employees) were raised by parents who taught you not to... talk about your financial concerns or problems that you’re having outside of the family, it was kept very hush-hush. And so it’s taking that additional step and... just being able to talk about it, knowing the resources are available.”

As with mental health, we’re starting to see a de-stigmatization around people’s financial situation, said Wiginton.

“Your financial well-being is kind of the last stigma that’s out there, so people are a little more open to maybe talking about that.”

But there is also the liability factor, with employers concerned about drawing the line between education and advice, he said. 

“That’s again where… maybe it’s important to have a third party providing this type of thing so that it’s not the company... The company’s only trying to do what they can do.”

There’s really no track record of litigation from employees in Canada, said Briant.

 “We all worry a lot about whether we should be offering advice or we should leave it to anybody else to offer advice, but employees are really looking for information. And I think similar to a relationship they have with their bank or their financial institution when they’re choosing external investments, you know, we shouldn’t get too caught up in that,” she said.

“Most plans don’t allow somebody to be 100 per cent invested in one very high-tech fund, as an example. So we’ve already put lots of safeguards around that and so I think as organizations, we shouldn’t be as concerned about the liability issue. I’m not saying we shouldn’t always focus on elements of risk but I don’t think it’s as significant in Canada as it may be elsewhere.”

The diversity of the workforce is also a challenge for financial wellness, said Naren Daniels, director of retirement and savings programs, total benefits, HR, at Sun Life Financial in Toronto.

“When you look at the cross-generational needs, the way people are engaged, the younger population, it’s much different today. And they are looking for other things than retirement, which is not in the near future, or savings, really. And so how do we capture that attention? How do we turn it into something that they can understand will benefit them? If you run a cash flow planning seminar, it’s not a terribly thrilling topic.”

And when it comes to financial education, numeracy is a huge part that’s missing, said Wiginton.

“Let’s take a further step back and look at OK, why is it that 60 per cent of Canadians have a level-two numeracy skill level, meaning their ability to deal with only simple, clear, uncomplicated tasks involving numbers? And then try and translate that to all the stuff we talk about when it comes to money and how complex it becomes, and it’s no wonder that a large portion of the population cannot connect with what’s being delivered.”

Reaching employees successfully

It’s about reaching employees where they are and enabling them, said Vatche Rubenyan, senior director of compensation and benefits, HR, at Rogers Communications in Toronto.

“I know it’s a cliché but it sounds like customization might be the way to go,” he said. “Often, when we seek solutions, there’s still a big — I don’t want to use the word patronizing — but it’s sort of like Big Brother saying, ‘OK, you know, the employer is offering this program that will solve all your problems.’”

The reality is people won’t respond because of differences with their needs and their personal state, said Rubenyan.

“I’m seeing (more) differences now than say two years ago. Some of the solutions that are being offered now I think are really good and I think, funnily enough, we’re getting some push from our businesses where people are coming together and saying, ‘Hey, HR, can you offer this program?’… We have this segment of the population, they all want to retire, so it’s a very specific need: ‘What can you do for us?’”

With demographics and disruptive technologies, traditional definitions of concepts don’t apply anymore, said Rubenyan. For example, with retirement.

“The discourse isn’t ‘Whether I retire at 62 or 65...’ It used to be and it probably is for a large segment of the population, but there’s a lot of people who have moved beyond that,” he says. “For them, retirement doesn’t have an age, it’s really a state of physical, mental state, where they will say, ‘You know what, I’m ready to go, I’m ready to stop and whether I’m 55, 50, yeah, for me this is retirement.’ So I think where we’ll have some challenges is when we try to define what is retirement now. You’ve got to be careful because it might not apply to everyone.”

Employees are inundated with information at any given time, said Daniels, “but there’s no framework or steps on how to engage or use the tools at what appropriate time and to really derive something meaningful from that to go and springboard and create a solid action plan. They just don’t know.”

A workshop-oriented program, for example, can see employees discussing the issues and then coming back six months later to talk about the ideas they’ve implemented, he says.

“That way, you can see what works for some people, what doesn’t for others and move on.”

When you’re trying to change the philosophy in an organization, sometimes it’s about the little things, said Daniels.

“We actually provided workshops based on early, mid- and late career, and it was interesting to see there were little differences between the seminars or the workshops. And the behaviour change was radical, actually.”

Targeting employees with more focused messaging can help in segmenting people by gender, age groups or career stages, said Buchanan.

“It’s about individual contact because it’s a very personal thing,” she said.

“It’s not something you’re going to fix with one webinar. It’s just specifically about a person and that person’s moment in time, because how you are six months from today may be dramatically different than two years from today when you’ve lost a spouse or you’ve lost a job.”

Changing behaviours

One successful program by Sun Life involved financial advisors as part of financial literacy campaign, said Daniels, where people could log in to book an appointment.

“What’s interesting is when we bring the advisor to the people, they generally go. And it’s all surrounding the heightened awareness of this financial literacy for this 30-day period.”

Workshops on cash flow planning were also popular, he said.

“People that entered the program… didn’t quite understand 100 per cent what it was. When they exited the event, they were really surprised and they found it incredibly valuable. And through word-of-mouth, we’ve started to get more enquiries and a little bit more demand for it, so it’s very interesting to see how you can have a little tidal shift occur through word-of-mouth as well when there’s good experiences.”

Cineplex has made a real determination to keep general programs as simple as possible, said Briant. Many years ago, it switched from a defined benefit to a defined contribution pension plan. And a couple of years ago, it switched to a group RSP.

“We felt that while there’s always a painful transition year that, at the end of the day, employees would be better-served with a plan that they already had frequently a general, intuitive understanding of, just from the external marketplace,” she said.

“We could make it simpler for ourselves in not having the whole actuarial level of detail and reporting level of detail that’s required in the pension plan. And they’re just simpler plans to understand and of course have a degree of affordability that in today’s economy, employees really value… I think you up your chances of participation if it’s something that employees can easily understand and make a simple choice about, rather than trying to sort of drive them to the well to learn more.”

Another option is welcome programs for employees. A few years back, Economical introduced one in partnership with its provider, said Buchanan.

“We wanted to stem that sort of behaviour, that lull or that lack of information, that gap when they start,” she said.

“So they’re very much engaged from day one in the programs that we offer and knowing the age and stage that that individual is at — it could be somebody who’s just entering the workforce, it could somebody who is well-established in their career, so they have different needs... they make the connection right away with the provider and they also have access to additional resources, whether that be investment advice and/or a financial advisor as well. So (it’s about) really making that commitment to them the minute they walk through the door and having an understanding of those resources that are available.”

Sun Life also introduced a welcome solution program that’s had an incredible impact, said Daniels, adding it can be done over the phone, with little paperwork to confuse people.

“What it’s translated to is a bit of a tiered approach in terms of contribution scales,” he said, adding many employees are now contributing at the maximum.

“A lot of that was because of the implementation of this reach-out program when people are first enrolled. So that way, they’re in from the gates and then it’s a matter of just furthering their learning, so it can be incredibly powerful if the employees have nothing to do but to say yes or no over the phone. I think it’s that path of least resistance — people are always looking for that and it’s an easy way to get enrolled.”

Gauging knowledge

What would also be helpful would be some kind of questionnaire that assesses a person’s financial situation, said Daniels.

“I know in the U.S. they’ve attempted programs like this where they’ll analyze an individual’s statement and indicate a green, a red or a yellow light to indicate where they need to pay a little bit more attention,” he said.

“I would love to bring something like that to our population or create a questionnaire that really assesses somebody’s overall financial wellness.”

As one solution, Wiginton cited an eight-question scale by the Personal Financial Employee Education Foundation in the U.S.

“It doesn’t really focus on how much money you have, it doesn’t focus on wealth and that kind of stuff; it focuses on ‘How do you feel about money?’ And… ‘Does this stress you out in this type of situation?’; ‘Are you able to do it or are you not able to do it?’” he said.

“Because it’s such a quick, short, simple survey, it gets a high completion rate, it gets really high standards and marks.”

And on the data analytics side, providers can give employers lots of breakout data, said Briant.

“If you look at the categories that people are accessing help for, that’s a great guide for you as an organization to think about where you want to put your resources. Because if it’s 30 per cent on financial distress, then that’s quite a signal.”

Employer’s role

But there’s a healthy discussion to be had around the degree of involvement employers feel they should have in an employee’s life cycle, said Briant.

“They have full lives that we know very little about outside and lots of different family circumstances. And so I think that the starting conversation shouldn’t be ‘It’s the right thing to do’ but ‘What’s the level of involvement that is appropriate?’” she said. “There’s an endless list of items that you could help employees with and... you need to make those choices.”

Companies definitely have a role to play in helping employees reach that end goal around financial wellness, said Daniels.

“We know that financial stress is one of the stressors out there that affects people from a mental wellness standpoint. So it’s definitely a component that we feel is important.”

Employers have a role to play — but it’s just one component, said Rubenyan.

“At the very least, I think as sponsors and employers, you should have a very clear strategy and say, ‘This is what we’re going to do. This is our plan,’” he said. “It’s really around providing the right information, the right education and helping employees know where to go if they need information.”

For video footage of this roundtable, visit http://www.hrreporter.com/video/462-roundtable-on-financial-wellness-video-1/.