How to prioritise your financial wellbeing to-do list
Sorting the wood from the trees
However, where to start? There is a plethora financial wellness applications, technology and benefits. These range from the more traditional in terms of long-term pension savings through to a more modern approach with educational tools, alternative savings like the corporate ISA or debt consolidation services.
The downside of so many opportunities (I am sure a number of readers have taken a meeting with a financial wellness-related business in the past 12 months!) is that there are so many subtle differentiators in the propositions available. As such, it is hard to see the wood from the trees as you strive to find what will work for you and your employees. This is because the term financial education is used quite broadly, with each financial education company having a slightly different view on how that works.
So, how do you prioritise? Well, we all know education should always come before products, so a typical approach would be summarised in the following order:
1. Understand your people data and demographics
Segment your data and understand who you employ. Start to think about the mediums and messages. Prioritise the potential partners and select the right one or two to partner with.
2. Communicate and educate
Work with the partners to provide road shows, seminars and broader content tools and technology.
3. Offer products, benefits or further technology
Provide a range of complimentary products to help support the individual – generally planning tools, a pension plan, debt consolidation and alternative saving opportunities.
There is nothing fundamentally wrong with this approach. However, if you are hoping to make a tangible difference and create a behavioural change in your people that means they actually take decisive action and ownership on improving their financial wellness, then I fear you will be left disappointed. The above approach has a missing key ingredient in terms of the data you need at the start of the process.
Our recent research demonstrated that assumptions around generational life stage, age, gender and whether people had a family had little bearing on their propensity to save money. So what is the missing ingredient that does make a difference?
The power of personality
An individual’s personality traits (based on the widely adopted five factor model) have a much bigger impact on an individual’s propensity to save than whether they are a millennial, generation X, male or female. In specific terms, it is the individual’s level of conscientiousness and their level of neuroticism that has arguably the most significant impact.
Can you do something with this? Of course you can, and the good news is you may already have the data needed. If you carry out personality assessments for recruitment or perhaps for management training, you are in a place where communications will become much more powerful. Prioritising this approach will actually affect the change needed in your people’s behaviour that will ensure you are not just paying lip service to financial wellness, you are helping people make the behavioural changes needed to really become financially secure.
Measuring success
There is one final piece of the puzzle. How will you know if the above has been successful if you don’t know their starting position and then continuously assess your people’s financial wellbeing?
You need to know that you are making a difference and helping your people thrive, if not realistically, you’re just paying lip service to financial wellness and it won’t make a difference to your people or your business. A priority therefore must be the introduction of a financial wellness index, a tool which enables you to create your own personal benchmark, as well as a benchmark against other organisations – ours uses a survey approach to achieve this. This is followed by a continuous engagement of people so you can measure the difference you have made and can demonstrate to your people, and the business, the difference the strategy is making.
So, your new to-do list should therefore look a lot more like this:
- Put a stake in the ground and create your own personal benchmark.
- Understand your people data and demographics but include personality.
- Select the right partner(s), communicate and start the education process using your enhanced data set.
- Offer products, benefits, services and technology on a personalised basis with your enhanced data set.
- Measure, measure and measure on an on-going basis.
- Learn, evolve and create continuous improvement.
The author is Nick McClelland, director, JLT Employee Benefits.
This article was provided by JLT Employee Benefits.
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