As workplace financial wellbeing continues to gain traction, leading consultants are on the cutting edge of industry trends and insights. Our team at LearnLux recently sat down with David Wilson, Insights and Innovation Program Manager at Lockton to explore what he is seeing in the space.
Drawing on data from Lockton's national benefits surveys, David shares the industries and workforces that are actively implementing financial wellbeing programs today. The interview also explores the convergence of financial wellbeing with broader health and wellness benefits. Research illuminates the strong connection between financial stress and negative effects on mental and physical health, with a call for employers to take action.
David, thanks for speaking with us today. Please tell us a bit about your role as Insights and Innovation Program Manager at Lockton.
As part of Lockton’s Insights and Innovation Lab team, we help Lockton clients and teams by filtering the market, providing education on relevant trends, and evaluating solutions to help drive continuous improvement for our People Solutions clients.
David Wilson, Insights and Innovation Program Manager at Lockton
Why are you passionate about employee financial health?
My passion for financial wellbeing took root surprisingly early – back in high school. During my junior year, I had to take a personal finance course that had a profound impact on my financial journey. This course equipped me with essential financial literacy and transformed my approach to money, which in turn has significantly reduced my money-related concerns and stress in adulthood.
Shortly after entering the professional world, I quickly realized that this is not the case for most people. Many lack basic financial literacy which causes them to be overwhelmed and stressed with their finances. It’s this realization that has fueled my passion to help as many people learn about basic personal finance, in the hopes that it changes their lives as much as it has mine.
Are there any macro trends that you see are impacting employee financial wellbeing?
Inflation and the unpausing of student loans have been top of mind for me.
According to the U.S. Bureau of Labor Statistics, the overall inflation number for 2022 closed out at 6.5%. But what many don’t realize, yet surely felt financially, is that the 6.5% number was mainly driven by categories like food, housing, and energy. Given that these are all necessary expenses, employees are feeling the financial pressure of inflation in their day-to-day lives.
Over the past three years, the student loan pause has been a ticking financial time bomb in the back of my mind. According to educationdata.org, the average estimated monthly student loan payment is $503. That means when payments resume, 40+ million borrowers will have to figure out how to budget for what is equivalent to a new car payment but with no car to show for it!
How do you see financial wellbeing aligning with other health and wellbeing benefits being offered today?
A recent Bankrate Study found that “52 percent of U.S. adults said money has a negative impact on their mental health, including causing stress.” Research from Purdue University shows that “high levels of financial stress manifest through physical symptoms like sleep loss, anxiety, headaches/migraines, compromised immune systems, digestive issues, high blood pressure, muscle tension, heart arrhythmia, depression and a feeling of being overwhelmed.” Employees who are plagued by financial worries are less likely to be engaged in their work and participate in initiatives such as wellness programs, surveys, team building, and social activities.
Given the impact financial health can have on overall mental and physical health, I see it as an important piece of an overall health and wellbeing strategy. By providing resources for financial wellness, employers can contribute to an environment where employees can fully focus on their tasks and feel motivated to engage in various work and social activities.
What types of workforces/industries do you see implementing financial wellbeing programs right now?
Financial wellbeing programs are gaining traction! Data from Lockton’s 2022 and 2023 national benefits survey revealed that 67% of employers offered access to personal financial coaches in 2022 and in 2023 that number jumped to 80%! Specifically, the Lockton survey saw the largest jumps overall in manufacturing, legal, and retail.
How can employers play a more active role in promoting financial wellness among their employees, and what outcomes can organizations expect from investing in such initiatives?
Employers have a spectrum of financial wellness solutions to consider depending on their workforce’s needs and budget.
To start, they can source support (education, counseling, tools, etc.) from local banks and credit unions or their current retirement partners. If that support is not sufficient for their population’s general financial wellness needs, they may want to investigate a more comprehensive general financial wellness platform.
Similarly, if their population has a lot of student loan debt, they may want to look at student loan assistance programs. Or if they have current tuition needs, they could look to tuition assistance and tuition reimbursement programs.
Lastly, on-demand pay/early-wage access programs, emergency savings programs, or short-term loan programs may be helpful for specific populations.
As for what to expect, the data shows us that 65% of Americans say money and the economy are a significant source of stress and that 76% of employees suffer a loss in productivity. Financially stressed employees are twice as likely to look for a new job with 3 out of 4 attracted to new companies that care more about their financial wellbeing. Thus, employers that help their employees’ financial stress can, among other benefits, anticipate an increase in productivity and retention rates.
While not necessarily direct measurements, these things could be evidenced by KPIs related to platform utilization, employee financial data reported in aggregate from the platform (ex. average debt levels), increases to 401k contributions/HSA contributions, employee satisfaction surveys, etc. Prior to implementing any program, employers can start to understand this space better by looking at a benchmarking study for their industry, conducting a benefits and wellbeing survey, and holding focus groups to better understand the financial concerns and areas of support their employee population desires.