HR leaders have long relied on engagement surveys to monitor workforce health, but when it comes to financial matters, many are still figuring out the best ways to measure the need, and the impact.

“Financial wellness is still a topic many of us are trying to get comfortable talking about,” said Julia Fearn, director of channel partnerships at SoFi at Work, during a From Day One webinar on how employers are tuning financial stress into measurable engagement.

Contrast this with growing demand from the workforce. “Employees are more and more asking for their employer to help them,” she said. “But employers aren’t yet comfortable with that.” While 66% employees want some sort of financial well-being support from their companies, only 23% of employers offer it.

Even without direct conversations, financial strain leaves a trail. It shows up in increased 401(k) hardship loans, low retirement plan participation, and sometimes in direct deposits, whether into checking or savings.

At the same time, benefits leaders are doing everything they can to stretch a dollar. Rising healthcare costs are consuming a larger share of the benefits budget, limiting the ability to expand and experiment with new offerings.

“What we’re hearing this year is that the vast majority of benefits leaders are looking to reallocate or maximize efficiency of what they’re spending,” Fearn said. “What can I squeeze out of the ecosystems that I already have to make sure we’re maximizing what’s already there?”

Some employers are offering emergency savings programs, which can help employees cover unexpected expenses, like a $2,500 car repair, without borrowing against their retirement savings. And employers are also experimenting with how to drive participation too. Incentives, Fearn said, can be effective if they’re designed for long-term behavior change.

“Providing incentives and checkpoints does drive behavior,” Fearn said. Short-term rewards, like winning a FitBit or a gift card do work, but only for a short period of time. Longer-lasting incentives, like employee matching, are more effective because they reinforce ongoing behavior, not just one-time actions. “It doesn’t have to be a huge dollar amount to have a very meaningful impact,” she said, noting that even a $100 match on a $500 contribution can meaningfully shift behavior.

For employers, the payoff of financial well-being programs can extend beyond the individual to broader workforce shifts. The key question, Fearn said, is: What are you trying to achieve, and how many people can you impact? 

In some cases, financial wellness benefits have led to measurable reductions in turnover. According to Fearn, one healthcare organization saw a 21% drop in turnover within the first year of launching a student loan contribution program. A consumer goods company reduced turnover from 13% to 6% after introducing a similar benefit. Notably, even though only 9% of employees enrolled, the impact was felt across the broader workforce.

“From a benefits perspective, there’s been a lot happening in the last few years, when it comes to supporting physical and emotional well-being,” Fearn said. “Though there’s a lot of alignment in terms of what employers are doing and what employees expect, we’re seeing one of the biggest disconnects around financial well-being.”

Closing the financial wellness gap requires employers getting comfortable with a topic many still feel is taboo, but the payoff is there, what begins as stability in one person’s retirement account can affect the stability of the whole workforce.

Editor’s note: From Day One thanks our partner, SoFi at Work, for sponsoring this webinar. 

Emily McCrary-Ruiz-Esparza is an independent journalist and From Day One contributing editor who writes about business and the world of work. Her work has appeared in the Economist, the BBC, The Washington Post, Inc., and Business Insider, among others. She is the recipient of a Virginia Press Association award for business and financial journalism. She is the host of How to Be Anything, the podcast about people with unusual jobs.

(Photo by Nanci Santos/iStock)