Workplace Financial Health Innovation: Exploring the Spectrum of Financial Guidance Solutions for Your Employees

Employees across industries are managing a wide range of financial health needs, and they are increasingly looking to their employer for support. As employers consider how best to support the financial health of their workforce, there exists a wide variety of financial guidance solutions that they can offer. Some solutions offer basic financial education on concepts and products, some use financial products to support specific financial needs, and still others offer more therapy-based solutions. There is also a growing number of financial coaching services, which provide customized financial advice, working closely with individuals on their financial goals. As employers consider which financial guidance benefits to offer, they must consider a range of factors – including the makeup of their workforce, how the guidance is delivered, and cost structures – in order to identify the most high-impact solutions for their employees.

For nearly three years now, workers have managed financial volatility and uncertainty brought on by COVID-19 and an ever-changing economic landscape. The pandemic changed the nature of work, as well as the role of employers in the lives of their workforce.

Workers want solutions that can help them improve their financial health and manage the increasing complexity of their financial lives, and they are looking to their employers for support. More and more, companies are responding with a growing array of financial wellness benefits that provide financial guidance to their employees. These types of benefits have the potential to help address employees’ financial concerns, reduce financial stress, and improve their financial health. 

According to the Financial Health Network’s Financial Health Pulse® 2022 U.S. Trends Report, which measures the financial health of Americans, financial health in the U.S. has declined for the first time in the report’s five-year history.¹ The percentage of people considered Financially Healthy – meaning they are able to spend, save, borrow, and plan in ways that will enable them to be resilient and pursue opportunities – decreased from 34% in 2021 to 31% in 2022.² As an uncertain economic outlook continues to loom and pandemic-era monetary stimulus and support have ended, the need for financial guidance is as pronounced as ever. Demand for financial wellness benefits was on the rise pre-pandemic, and it has continued to grow over the last three years.³

Individual financial health needs are as diverse as the workforce itself, and financial stress can impact any and all employees. Many of these needs are short-term, yet employers traditionally offer benefits that address long-term needs, such as retirement benefits.⁴ However, research suggests that support with something as immediate as creating and following a budget can leave employees feeling more in-control and confident.⁵ This confidence can lead to less stress, which has the potential to improve workplace productivity, job retention, engagement, and ultimately, profitability.⁶ 

In a survey of 1,000 employees at midsize and large U.S. firms, 71% of respondents said they would be comfortable discussing financial matters at work with a financial professional unaffiliated with their employer, with younger employees saying even more frequently that they welcome this type of financial support.⁷ The complexity of workers’ financial lives requires a tailored and effective solution. 

For employers ready to begin offering new benefits or review their existing offerings, there is a spectrum of financial guidance solutions in the market. For example, education platforms typically offer an explanation of concepts and benefits, leaving individuals to make their own decisions regarding their financial journey. These types of solutions don’t prescribe specific next steps to achieve financial goals.

There are also financial coaching solutions, which involve customized financial advice from a trained and trusted individual or organization, addressing specific financial health challenges mutually identified between the coach and the individual. Unlike financial education solutions, financial coaching presents actionable and personalized solutions, such as creating budgets and monitoring progress.⁸ There is demonstrable evidence that financial coaching improves financial well-being and changes financial behaviors.⁹ 

Separately, financial planning services provide individuals with a comprehensive view of their financial lives and futures, often creating itemized roadmaps that address things like future income projections and asset management. Providers of these solutions can act as fiduciaries, employing Certified Financial Planners who advise employees and/or clients on specific actions to undertake. 

Newer and innovative models of financial guidance, such as financial therapy and financial care, have also emerged. Financial therapy deals with the emotional side of money management and uses evidence-based practices and interventions to help clients improve their overall well-being in addition to their financial health.¹⁰  

In addition to various models of financial guidance solutions, there are also multiple types of delivery channels, including digital-only, in-person, virtual bot, human chat, or a hybrid approach that may combine in-person sessions with digital monitoring or chat functionality. Increasingly, solutions provide real-time digital access and response while also offering some kind of human touchpoint, if requested. Research has also shown that guidance that is immediately actionable is associated with higher completion rates.¹¹

Financial guidance and support within the workplace is growing. Employers are increasingly offering their financial wellness benefits to employees and advertising them to candidates; in turn, individuals are looking to their employers to play a more supportive role in their financial health. Among the various types of financial wellness benefits that exist, financial guidance is an increasingly common form of this support. Across the spectrum of solutions, financial coaching is unique in offering personalized and objective guidance across a range of topics to help employees make timely progress toward goals. All employees manage complex financial lives, and employers will be wise to offer financial guidance solutions that meet their workforce’s specific needs.

For more employer resources or help determining what might work best for you and your workforce, please reach out to the Financial Health Network’s Workplace Solutions team. Our experts can help employers and HR teams make informed decisions on improving the financial health of their workforces. You can also explore the full Employer FinHealth Toolkit.