by Kalyn Stockman

The COVID-19 pandemic is a strong reminder that we need to be more prepared for unexpected events. The pandemic has caused major disruption in the financial services industry, and enterprises and their associates are feeling the consequences. Because of this uncertainty, and for the sake of employee wellness in general, it’s time for HR leaders to start thinking about implementing or improving their financial wellness program.

Financial wellness is key to employee satisfaction.

What Is Financial Wellness?

New technologies such as artificial intelligence (AI) are changing the software landscape and allowing for a better understanding, and therefore preparation, for current and future events. Springing from these improvements in technology, financial wellness has emerged as a new category of benefit that will assist people in accurately planning for their life events; this includes, but is not limited to, retirement.

To dive further into depth, financial wellness refers to the “new class of software application that allows for the complete lifecycle of financial planning and management” (Hot Vendors in Financial Wellness, 2020). It allows for the automation of budgeting, saving, and the investment process. This makes financial planning and wellness more accessible and a more seamless experience, therefore enabling more associates to meet their life goals. 

There are four main aspects of financial wellness, as follows:

• Enrollment and onboarding
• Predictive planning
• Managing life goals
• Investment automation

We will dive deeper into these four areas a bit later on. 

Key Benefits of a Successful Financial Wellness Initiative

For HR leaders, taking steps to support financial wellness within the enterprise is crucial. A solid financial wellness initiative will have a large, positive impact and many benefits for employees. It will also contribute to reducing employee turnover at your firm. Financial wellness is actually poised to become one of the most sought-after employee engagement offerings and benefits that any enterprise could offer to its associates. Let’s discuss some of the key benefits of having a successful financial wellness initiative. All of these benefits ultimately lead to higher employee satisfaction, a huge benefit in itself to both the employee and the firm.

• Builds a level of trust between the associate and the enterprise
• Educates your employees about the importance of financial planning, helping them to become more prepared for life events—which is especially critical right now
• Prepares employees for retirement
• Embraces AI and automation, which results in smoother, less flawed financial processes

How to Get Started With Your Financial Wellness Program

It is easy to see the importance of having a solid financial wellness program in your enterprise, but actually getting started on this plan may seem daunting. Luckily, there are several providers out there that offer cutting-edge products, services, or technologies in the financial wellness market that you can adopt. 

Our recent report, Hot Vendors in Financial Wellness, 2020, is a great place to start in terms of learning more about financial wellness (it’s current and future state as well as its importance), but also to begin evaluating financial wellness providers. Aragon has identified 3 vendors in financial wellness that are making a difference. 

While there are providers out there to help with your financial wellness program, it will still take work from the enterprise, and mainly HR leaders, to put this program in place. Earlier, I mentioned the four main aspects of financial wellness (enrollment and onboarding, predictive planning, managing life goals, and investment automation), but now let’s dive a bit deeper into each of these so you can understand what a solid financial wellness program is made of, and make sure yours is all-encompassing.

• Enrollment and onboarding: You need to make sure to take the time to onboard your employees onto your financial wellness plan. This process should be smooth and emphasize to the employees how this program will benefit them. If your employees understand the program, they will be able to get the most out of it. 
• Predictive planning: Aragon predicts the rise of predictive planning which will be built into many financial wellness applications. Hot Vendors in Financial Wellness 2020 explains this predictive planning as “essentially an AI-based application that uses certain deep learning algorithms to continuously run models using data from a variety of sources to accurately help associates understand their potential outcomes if they take certain actions tied to portfolios and investment strategies.” This will lead individual employees to the optimal financial wellness journey based on their unique characteristics.
• Managing life goals: The managing process of your financial wellness program is important–this is how employees will know if they need to make adjustments to their financial wellness program experience throughout time. AI and analytics will make the managing process easier and more engaging than past methods–managing your financial wellness program could now include things like alerts when spending gets off-track and notifications on things such as personal balance sheets.
• Investment automation: Automated investing helps the employee’s desired outcomes become achievable. While they can technically do their own investing, automated investing seems to be more seamless and effective, and removes certain flaws from the investment process. For example, it keeps associates from acting emotionally and trading at the wrong times, which could be a significant drag on investment performance. 

We expect that more providers will emerge in the financial wellness industry in the near future. We also expect to see much more innovation in the market and encourage HR leaders to pay attention to this important movement. In a time filled with uncertainty, one of the best things organizations can do right now is invest in their employees to ensure they’re prepared to weather the storm. Helping them have a better grasp on their financial health—and giving them the tools necessary to improve it—is a great way to start.