Monthly Archive for March, 2010

Financial Wellness. Why Employees Turn to their Employers.

Published by JLarocque on March 29, 2010 in Benefits, Financial Education, Financial Tools, Financial Wellness and for Employers. 0 Comments Tags: .

In 2007, for the first time since MetLife began running their Annual MetLife Study of Employee Benefits Trends, more than half of employees surveyed indicated that they receive a majority of their financial products from their employer.

For most HR professionals this may seem somewhat intuitive.  Prior to 2008, many employers had built out their benefits, retirement and equity programs to compete in what was considered an all out war for talent.  So, it may not be surprising that the large investments that employers have made to offer a compelling total compensation package have made employers the number one source of financial products for their employees.

But there are some important implications of this shift.  Virtually all critical aspects of an employee’s financial plan are now available through their employer.  This includes core products that protect wealth – including disability, life insurance and many other types of insurance.  And it includes products that build wealth including retirement, college savings plans, equity compensation and many others.  The fact is, employees consider their workplace plans to be the foundation of their financial security.

When it comes to personal finance, it may be surprising to learn that many employees don’t turn to one of those name brand financial services firms when they need something, they turn to their employers.  Over the past two years, it’s amazing how many HR professionals we’ve met with have told us that their benefits call center was being inundated with financial planning questions that they were not permitted to answer (e.g. “Should I refinance my mortgage?”).  Employers have become the face of so many financial products and yet a majority of these employers are not equipped to help employees understand them, use them and benefit from them.

Two things here are certain:

  1. Over half of your employees receive a majority of their financial products from you, their employer
  2. As the face of so many important financial products, employees are likely turning to you for answers and assistance in securing their (and their family’s) financial futures

The question is…will you answer the call?  You’ve offered your employees a compelling set of benefits and compensation programs…will you make the investments that help employees use them and solve their financial issues?

April is Financial Literacy Month

Published by JLarocque on March 22, 2010 in Financial Education, Financial Tools, Financial Wellness and for Employers. 0 Comments Tags: , , .

Back in 2000, April was declared “Financial Literacy for Youth Month.”  Now, it’s just “Financial Literacy Month.”  Over the course of the last decade, it seems that us grown ups have shown that we really don’t know much more about money than our kids do – and therefore the Senate decided to drop the “youth” bit and include us adults in their call for better financial education.

And so what exactly are the folks in Washington trying to accomplish by dedicating an entire month to financial literacy?  Well, it’s quite simple actually.  See, the government recognizes that a key to restoring confidence in our financial system and maintaining America’s competitive advantage in the world is to provide financial education in our schools and workplaces.  And, while what we do in our schools is critical over the long-term, the best way to impact America’s reality today involves getting employers, or more specifically HR, to rally around the issue and help employees with their money.

Financial Literacy Month

Make the Most of Financial Literacy Month

In fact, those in Washington view the workplace as so critical to solving the financial literacy problem that recommendations have been made to extend tax incentives to employers that provide financial education (we’ll keep you updated on progress there).

You knew your job was tough, but seriously?  In addition to implementing that new talent management system, you have to restore confidence in America’s financial system?  Sounds like a lot of work.  Well, let’s take this one step at a time.  Here are some ideas for dipping your toe in the water and trying some things out come April:

  • Hold a “Creative Savers” contest.  Have employees submit creative ways they personally employ toconsistently live within their means and save for the future. It will be great for those who are struggling in this area to learn practical, everyday financial ideas that are making a positive difference in their co-workers lives.  And likely, while these ideas and practices can be quite creative, they will also tend to be relatively minor spending and/or saving tweaks that can be replicated in most budgets.  Have the 401(k) committee select the top three ideas, award some cool prizes to the winners and let the rest of the workforce benefit from their money magic.
  • Do a survey.  Financial Literacy month is a good time to take the money pulse of employees in your organization.  A well designed survey can help employees assess their financial situation and allow you to get a glimpse of the financial stress in your organization.  If you’re looking for a credible survey, I highly recommend the Personal Financial Wellness Scale which was built based on the research of Dr. E. ThomasGarman.  Uniquely, this scale allows employees (and HR) to compare results against national norms.
  • Do some seminars. Financial literacy month offers a great reason to reach out to your vendors.  You may want to start by calling your 401(k) administrator for retirement and investing related topics.  But don’t stop there.  There are a number of organizations that provide onsite financial workshops.  Some of these organizations are fee only, while others have programs where fees may be waived altogether.  If you are considering a no cost seminar provider, be sure that you understand the goals and objectives of the vendor.
  • Hold a fair.  Nothing like a little free food and drink to get the attention of your workforce.  These days, so many of your employees get the majority of their financial and health products from you.   Invite your vendors and have them come with thoughtful ideas about how to help employees improve their financial health – this may include topics such as saving for retirement, how to cut health care expenses or keys to a rock solid income protection plan.  In addition, make members of your benefits and compensation staff available for one-on-one discussions.

If you implement one or more of these ideas, you may be surprised at what you learn about your employees.  Employee financial distress is pervasive and you may decide that this April cause deserves a year round effort.

Benefits Communications for Today’s Employee

Published by JLarocque on March 15, 2010 in Benefits. 0 Comments Tags: , .
Benefits Communications

Traditional Benefits Communications Not Reaching Today's Employee

We used to make this distinction about certain people being “web savvy” but these days it seems we’re all pretty web savvy – perhaps there is just different degrees.  One of my colleagues always uses the example of his 85 year old grandfather forwarding him YouTube clips to illustrate this point.

At GuideSpark we spend much of our time talking to employers about taking a modern approach to benefits communications.  When we meet with an HR professional for the first time to discuss their specific issues, many of them seem to have this sense that the world of communications has somehow passed them by.

Naturally, we start by helping HR professionals think through their current approach.  I’m not sure it has ever taken us more than a couple of minutes to convince someone that thick handbooks, brochures and text heavy Web pages are not getting the job done.  The fact is, if this HR professional didn’t believe this to be true, they wouldn’t have met with us in the first place.

And then, we walk through how to really create a Benefits Communications strategy that aligns with how employees are learning today.  Here are 3 guiding principles that we offer:

  • Utilize web-based multimedia.  According to comScore, U.S. Internet users watched an average of 187 videos per viewer in December 2009.  Employees are conditioned to expect rich media formats when accessing information and they want it available on demand.
  • Leverage communities and shared learning.  Blogs have become a legitimate corporate training ground and in February 2009, social media usage exceeded that of email for the first time.  While not all subjects are appropriate for a shared learning environment, when making decisions, employees often just want to know what others are doing.  Build a community around your benefits and allow them to share information through polls and message boards.
  • Accommodate short attention spans.  Competing for just a few minutes of a busy employee’s time has never been more challenging.  Attention spans are shrinking each day.  A great example of this phenomenon is Twitter.  Twitter limits communications to just 145 characters.  To be effective in communicating to this crowd, you must work to make your benefits communications modular, concise and meaty.

Start with these and we promise you that your Benefits Communications will begin to have the impact that you desire.