LFE Institute Compiles Top 10 Traps to Avoid in Your Financial Wellness Program

After the dramatic volatility in the Dow last week, employers are more concerned than ever about stretching every dollar as they identify employee benefit expenditures for 2012, according to the LFE Institute. A recent Workforce Week publication emphasized the importance of Human Resource professionals making decisions that improve bottom-line profitability if they want CEOs to view them as full-fledged business partners.

The Birmingham News reported that employers are now correlating employee financial stress to their company’s bottom line. To further support this assumption, in the 9th Annual MetLife Study on Employee Benefit Trends, researchers found compelling evidence that employee Financial Wellness is a key factor in reducing employee labor costs, including presenteeism, healthcare, and financial stress-related illnesses. Plus, with productivity reports this week showing a decline for the first two quarters of 2011, employers are committed to getting employee focus back on the job rather than their money problems.

“Employers today realize that Financial Wellness programs are a key ingredient for improving profits and minimizing liabilities,” states Alice Whinnery, a former CPA with PricewaterhouseCoopers and CEO of the LFE Institute. “Companies are looking at global metrics for every dollar spent. While employers increase spending for financial education, they also know that simply delivering financial information won’t change behaviors, improve financial wellness, or generate sustainable results.”

Top 10 Traps to Avoid in Financial Wellness Programs:

Multiple factors must be in place if employers want to achieve maximum results. To ensure the success of your programs, watch for these traps when selecting a Financial Wellness Provider:

1) Hidden agenda. Determine the real objective of the provider. If education isn’t their primary service, identify the products or services they hope to sell or promote to the employees. This will help you determine the focus of their information.

2) Doesn’t solve problems. Financial information doesn’t change behaviors or generate sustainable results. If employees are financially stressed, struggling to make ends meet, overwhelmed with debts, or trying to find more money to save and invest, the typical investment or retirement planning workshop isn’t going to solve those problems. They need specific solutions that solve identifiable problems.

3) Doesn’t engage employees. In the latest edition of Telling Ain’t Training, Harold Stolovitch and Erica Keeps state the old delivery format of lecture with some Q&A is outdated and ineffective. Corporate training has evolved into a science today. To ensure results, workshops should include the latest skill-based training methodologies to engage participants in the process of learning from the minute they walk in the door. This is the only way to change attitudes, behaviors, and build skills.

4) Failure to generate measurable results. Employees should leave the workshop with clear, identifiable strategies to quantify how the skills learned will change their lives. Without the ability to measure predictable results immediately, employees lose interest and revert to previous spending habits.

5) Too complicated. Employees don’t need to learn how to create a balance sheet or an income statement, and the days of tracking every nickel and dime in a detailed budget–regardless of whether it’s automated–are gone. Nor are they impressed with complicated charts and tables. They want easy-to-use solutions to real problems with everything they’ll need to implement the strategies included in the course materials. Each course should specify the deliverable results, along with the problems to be solved.

6) Limited solutions. A diverse workforce, busy schedules, and different learning types mean that employers must find solutions that fit their employee group. On-site workshops, evening and weekend Instructor-led Web training, weekly up-to-the-minute e-learning, and Money Coaching to answer specific employee questions at the time they are making financial decisions are all options to help employees meet today’s economic challenges.

7) Takes too much time. The old adage “time is money” has never been more relevant. Employees don’t have time to attend full-day or multi-week workshops, and if the strategies they learn aren’t fast and simple, they just won’t use them.

8) Instructors are financial salespeople, not educators. To generate predictable results and build employee skills, employers know that knowledge of the latest training techniques is far more important than the ability to sell financial products and services.

9) No follow up. Employees will always have questions or need help following a workshop. Unlimited access to unbiased educators continues the learning process long after on-site or Web training is over.

10) Possible liability exposure. Depending on the content of the material or the peripheral solutions offered by the Provider, companies may be exposed to potential liability, and the personal assets of Plan Fiduciaries may be at risk. When considering retirement planning education, under the new ERISA guidelines, it should be offered by “someone who does not stand to benefit from the education.” In other words, the education is not delivered by a firm selling investment and/or retirement planning products.

As employers weather current economic challenges, identifiable outcomes in 2012 Benefit Package expenditures must be directly linked to cash outlay. A methodical selection process of an effective Financial Wellness Provider will help eliminate the key traps noted above and increase the chances of meeting corporate objectives.

About the LFE Institute:

LFE Institute provides unbiased Workplace Financial Wellness education through on-site and Web-based workshops, comprehensive online and telephonic Money Coaching, and a weekly e-learning Money Minute! publication, and has Certified Instructors and Money Coaches throughout the U.S.