Employees fully engaged in a financial wellness program can experience significant improvement in a short amount of time, particularly for those who are financially stressed, a new study suggests.
Financial Finesse’s “2019 Financial Wellness Year in Review” finds that employees who engaged in online, group and individual coaching with respect to financial wellness benefits had a 43% higher retirement plan deferral rate and an 81% higher annual contribution to an HSA or FSA than employees who engaged exclusively online.
In fact, the study notes that repeat engagement in all forms of learning produced improvement in financial wellness across the board, but the greatest net difference between improvement among employees who engaged exclusively online and those that engaged in all forms of learning occurred in the areas of retirement planning and investing.
Fully engaged employees contributed on average 9.18% to a retirement plan and $1,565 a year to a tax-preferred savings account, compared to online-only employees who contributed on average 6.43% and $866 a year, respectively, according to the firm’s findings.
Employees who engage in their financial wellness benefit repeatedly were also found to be 50% more likely to run a retirement projection than those who engage in their benefit for the first time. What’s more, for the third year in a row the percentage of employees who reported taking a retirement plan loan or hardship withdrawal within the last 12 months declined, from 29% in 2016 to 17% in 2019.
The 47-page report also reveals that employees who engaged in all three channels improved their financial wellness score, outperforming group learners by 31% and online-only learners by 83%, and recorded a 29-point drop in the percentage that have high or overwhelming levels of financial stress, from 70% to 41%.
“These results are astounding,” notes Liz Davidson, Financial Finesse Founder and CEO. “What is even more remarkable is the speed of improvement. Employees with poor financial health exhibited significant improvement within three years of engagement,” she adds.