In our first blog post, we noted that small and mid-sized employers were less likely than larger businesses to provide workers with financial wellness services. In this post, we discuss changes in the financial wellness marketplace that should open the way for more small and mid-sized companies to join in.
For most of its existence, workplace financial wellness programming has largely been out of the reach of small and mid-sized companies. Traditionally, the financial wellness space had been designed for Fortune 1000 companies, with programs built around one-on-one financial advice and investment management services, and the numbers show it. The vast majority of companies providing their workers with financial wellness services have been larger firms.
But today, the workplace financial wellness world is experiencing rapid and dramatic changes that are making products and services more accessible to small and mid-size employers. In just a few years, three things have happened to dramatically expand options for employers.
First, there is a growing awareness among employers that a large share of families in America don’t feel financially secure and that financial insecurity can affect the workplace in absenteeism, distracted workers and high stress levels.
Second is a realization that the financial concerns of employees differ widely, depending on their personal circumstances. Some employees are focused on addressing immediate financial stability, while others are ready to work on building long-term financial security. So, a one-size-fits-all financial wellness program is unlikely to meet the needs of most employees.
This leads to the third big change; the number and variety of workplace financial wellness services and providers has exploded. In just a few years, dozens of financial technology (fintech) companies have launched digital financial tools aimed at small to mid-sized employers. Insurance companies, banks and credit unions have entered the market, and community-based nonprofit organizations that traditionally served at-risk families are also providing financial wellness services for employers.
As a result, the definition of workplace-based financial wellness programs has changed. It can include one or more services from among a wide array of financial education, tools and products. Moreover, the list of providers of workplace-based financial wellness programs is long and growing and include for-profit companies and nonprofit organizations. They range from in-house staff to large institutional providers like Fidelity, Prudential and Mercer. They also include fintech firms, like PayActiv, Stash and SmartDollar, that offer web-based education, tools and products accessible by smartphone or computer. Also, community-based nonprofit agencies like Neighborhood Trust in New York City, LIfeSpan in Southeast Ohio and Brighton Center in Newport, Kentucky are increasingly providing financial wellness services to employers.
As a result of all this variety, small and mid-sized employers are more likely to be able to find a combination of services and providers that meet the diverse needs of their workers at a cost that is consistent with their thin profit margins.
In the coming months, the National Fund will be exploring how small and mid-sized businesses are bringing financial wellness services to their employees. Stay tuned for insights into how creative business leaders are both improving their workers’ financial lives and helping their companies become more competitive.
If you know of a small or mid-sized firm (between 10 and 1000 employees) that is providing financial wellness benefits to their employees, let us know. We are surveying business leaders to help us further explore how companies are providing financial wellness services to their employees. Please contact Steve Adams at firstname.lastname@example.org or Mikaela Romero at email@example.com if you would like to get involved. For more information about our research, please read The Importance of Financial Wellness to Workers and Employers.