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Council Post: How To Harness Your Data To Support Employee Financial Well-Being



CEO & Founder of BrightPlan and a former executive at Cisco, is a longtime Silicon Valley innovator and business leader.

The past three years have been characterized by unpredictability as employees and business leaders grapple with the aftermath of a worldwide pandemic, rising inflation rates and the imminent threat of an economic downturn. Leaders are attempting to confront the challenges their employees face while driving cost efficiencies.

The U.S. is facing a financial wellness crisis that is worsening. In August, 60% of surveyed Americans were living paycheck to paycheck, according to research by Pymnts and LendingClub, and even 45% of those earning more than $100,000 annually were struggling to make ends meet. This isn’t just an employee problem, but also an employer one.

According to the 2023 Wellness Barometer Survey by our company, which provides financial wellness solutions, 92% of surveyed employees are stressed about their finances. We estimate that financial stress costs U.S. businesses nearly $200 billion annually in lost productivity and engagement. (This estimate assumes there are 100,206,000 knowledge workers in the U.S. with an hourly wage of $38.6, based on data from the Federal Reserve and our company.) This figure doesn’t even account for the impact of financial stress on employee turnover, absenteeism and delayed retirement.

Our research found that financial preparedness is low, with a majority of employees lacking basic financial literacy, carrying high levels of debt and not building adequate emergency reserves. Congress recently enacted the Secure Act 2.0 to address the rampant retirement and emergency savings crisis.


And while employers recognize that their employees need help, with many already incorporating one of myriad employee wellness solutions on the market today, they may not know how to best leverage their data or insights to drive effective solutions. To better support an increasingly diverse, distributed and global workforce, employers need to harness their data to support employees’ real-time needs in a way that leads to effective action and impact.

Supporting Employees In A Cost-Conscious Environment

There’s no arguing that the right benefits can pay dividends in the form of increased employee retention, engagement and productivity. And employers want to support their people despite the need to remain fiscally vigilant in the current market environment.

Being targeted, selective and focused in the support you offer your people is more critical now than ever. To ensure investments are made in areas that will drive maximum impact and to strategically match benefits and support programs to the top priorities of your workforce, you need the right data and insights.

What Data Reveals About The Financial Health Of Your Workforce

Accessing relevant, anonymized and aggregated employee data from your employee financial wellness solution can help you identify trends and gaps based on different employee populations, geography and more. This enables you to drive targeted and proactive solutions that improve employee well-being and, in turn, boost productivity, bolster engagement and positively impact the bottom line.

Technology is critical to surfacing employee needs in real time, identifying trends and revealing gaps. It can provide access to aggregate and anonymized data on employees’ progress in relation to retirement readiness, spending habits, etc., depending on your platform. You can use these insights to proactively support your people and improve business outcomes.

For example, by identifying workforce trends, such as a certain demographic having student debt that surpasses the national average or a later-than-average retirement age, you know which areas to invest in. This might include providing student loan assistance or incentives for employees to contribute toward retirement.

By creating practical solutions focused on reducing personal stress and improving employee well-being, employers can spend more wisely and maximize the value of their benefits offering.


Digging Deeper To Reveal What The Data Is Telling You

Relying on generalized workforce data may not be enough to adequately support all your people. With at least three generations currently in the workforce, employers need to find ways to accommodate a diverse set of needs. By segmenting employee data by demographic and location, you can provide personalized support reflective of the needs of particular employee populations.

For example, if the data indicates that certain groups of employees are struggling financially, you may choose to analyze benefits utilization patterns to confirm that your benefits package is truly comprehensive and addresses the diverse needs of all employees. Additionally, you may want to track recruitment practices, pay structures and promotion opportunities to ensure there is equity and fairness for all employees regardless of their background.

Using Your Data To Enhance Employee Well-Being And Drive Business Success

Leveraging data to surface insights and support your workforce with benefits that matter can lead to happier, healthier employees—not to mention measurable business impact, including potentially reducing turnover costs, decreasing absenteeism and improving employee productivity. By using data to identify trends and patterns related to employees’ financial habits and needs, you can develop targeted programs and resources to address employees’ current economic concerns, reduce financial stress and drive business success.

Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?

Source: Forbes


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