METLIFE WHITE PAPER FINDS EMPLOYEE FINANCIAL WELLNESS A GROWING GLOBAL CONCERN FOR EMPLOYERS
Case Studies Provide Insights for Helping Employees Achieve Financial Health
NEW YORK, December 6, 2011 – As the effects of the recent financial crisis continue to be felt across the globe, financial stress is an issue for both women and men. MetLife’s 9th Annual Study of Employee Benefits Trends found that 58% of employers state that financial “illness” plays a role in employee absenteeism and 78% said that concerns over financial problems while at work can have a negative impact on employee productivity. And it has been estimated that 15% of workers are experiencing stress from their poor financial behaviors to the extent that it reduces their job productivity.
In recognizing that employees need assistance in managing their financial future and understanding the value of employee benefits aimed at building financial wellness, employers are, in increasing numbers, providing employees with the financial education they need, according to a new white paper released today by MetLife. In coordination with the Boston College Center for Work & Family, MetLife examined how two large multinational firms have taken strategic measures to address the financial wellness of their employees. The MetLife Study of Financial Wellness Across the Globe is available at www.metlife.com/multinational.
“Financial wellness is a relatively new but growing concept, and there is an increasing recognition, across the globe, of the negative impact of financial distress on employee health and productivity,” said Michael Malouf, senior vice president, global strategies and sales, MetLife. “The MetLife white paper provides insights into how multinational employers can address the financial wellness of their employees by providing them with the financial education they need to successfully manage their personal financial, retirement and savings plans.”
The MetLife white paper, Study of Financial Wellness Across the Globe, highlights practices of multinational corporations American Express and EMC, focusing on their financial wellness programs at sites in Hong Kong, India, Ireland, Mexico and the U.S. The paper reveals how government provisions and cultural variations in different countries impact company decisions regarding benefit allocation as well as financial training. As these employers face challenges and opportunities that vary across the globe, the study looks at the specific steps they have taken to enhance their employees’ financial wellness to attain solutions that fit business and employee needs. Rich with external research that profiles worldwide financial trends, the paper also includes valuable information that will help employers better understand the issues their employees are confronting.
“American Express recognizes that financial distress can negatively impact employees’ productivity. In response to what we perceived as a need for employees to better manage their financial future, we instituted the Smart Saving program to provide them with financial education, as well as financial planning services that include one-on-one financial counseling sessions, at no cost to them,” said Barbara Kontje, director, Global Retirement at American Express. “We believe that the program has had a positive impact on their financial wellness, and are very pleased with the results we’ve seen. Since the launch of Smart Saving, there has been a 71% increase in calls to the financial planning counseling service and an 8% increase in 401(k) participation.”
“At EMC, we believe that there is a direct correlation between financial security and physical health. That is why we provide services in both areas. WealthLink was developed with an objective to increase our employees’ financial acumen. It provides them with personalized and action-based tools to understand and optimize their compensation and benefits. We see it as an important tool to attract and retain the best employees and to keep EMC positioned as an employer of choice,” said Kevin M. Close vice president, Global Compensation and Benefits at EMC. “During the 2008- 2009 recession, we were gratified to see that among WealthLink users, there was no scale back in contribution to 401(k) programs, as compared to a 7% decrease among non-users.”
Key Findings from the White Paper
The white paper highlights that:
- Financial difficulties can have a negative effect on worker productivity. There is evidence that financial distress may have a direct impact on employee health and well-being which can reduce worker productivity and increase absenteeism.
- Carried out correctly, financial education can have a beneficial effect on employee wellness. Financial education programs have the potential to lower financial stress, reduce absenteeism, increase productivity and lead to a more loyal workforce.
- Consumers are generally poorly prepared to make good investment choices. Consumer financial illiteracy is widespread globally and consumers are not sufficiently committed to their own financial well-being. While most people recognize that the government will not provide them with an adequate retirement income, this realization does not translate into increased savings or investments.
Best Practices for Global Companies
Malouf highlights the following best practices from the study as considerations for employers when implementing a successful global financial wellness program.
- Set a target and measure the results. Think about what the company wants to achieve with a financial wellness program – is it reduced employee stress, increased company loyalty, enhanced financial wellness or something else? Based on these desired outcomes, a formal assessment of the outcome of a program may be designed appropriately.
- Craft a message relevant for the target audience. Consumers vary in their financial needs and literacy depending on their life-stage and national culture, as well as their readiness to receive financial advice. These considerations, taken together with recognition of cross-cultural, generational and gender differences in financial literacy, risk aversion and attitudes to retirement, will help to make messages relevant for each target group and increase the probability of success in marketing a program.
- Use creativity to gain participation. Lack of immediate gratification; lack of time, money or knowledge; or plain denial; all prevent consumers from improving their financial literacy. In light of these factors, making the issue more real for employees through creative communications and delivery channels may help.
Interviews were conducted during March-July 2011 with global benefits executives in China, Hong Kong, India, Ireland, Japan, Mexico, the Netherlands, the United States and Singapore. Secondary research was done of prior financial wellness studies and also of government policies that have a bearing on financial wellness. Interviews also were conducted with three human resources executives at American Express and EMC with corporate responsibilities for different geographies. Additionally, reviews of company materials such as presentations and internal reports also informed the study.
MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers in over 50 countries. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia Pacific, Europe and the Middle East. For more information, visit www.metlife.com.