Financial wellness: Creating a more productive and engaged workforce. Tailoring the program

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1 Financial wellness: Creating a more productive and engaged workforce Tailoring the program 1

2 A message from James Reid As employee wellness programs have evolved over recent decades, they have expanded beyond simply focusing on health to encompass financial wellness. And for good reason: employees are stressed, and financial issues are often the cause. This is true across generations and socio-economic groups. To address the issue, companies are increasingly embracing financial wellness programs for their employees employers spent $8 billion on corporate wellness in 2016 with an increasing proportion allocated toward financial wellness. 1 Findings from MetLife s 16 th Annual U.S. Employee Benefit Trends Study (EBTS), released in 2018, illustrate the extent of employees' financial worries. The Study found less than half of employees, 40%, feel in control of their finances and 52% report living paycheck to paycheck. 46% of employees feel overwhelmed by financial decisions and 53% worry about their future because of their financial situation. Financial anxiety can impact other areas of employees lives, including their physical health, negatively affecting their focus and concentration and leading to a workforce that is overall less engaged and productive. Although it is not required for employers to intervene, it is becoming a business imperative: a successful financial wellness program boosts employee understanding and engagement in their benefits, reduces absenteeism/presenteeism, increases productivity, drives loyalty, and reduces turnover. James Reid, Executive Vice President, MetLife Employees are looking to their employers for help: according to the EBTS, 50% of employees say that employers have a responsibility for the financial well-being of their employees. Employers are beginning to recognize the important role they play, with 59% agreeing that employers have this responsibility. We ve developed this series to create a starting point for employers who want to help improve the financial well-being of their employees. As a global benefits provider, MetLife has been committed to financial wellness in the workplace and society-at-large for 100 years. Our experience in delivering benefits solutions to a diverse workforce uniquely positions us to guide employers as they look to implement a financial wellness plan, placing benefits at the center of the program and promoting a better informed and engaged workforce. As the drumbeat of financial stress among American workers grows louder, business leaders will realize that improving financial security for workers is a win-win for both employees and companies. 2

3 Personalization is key to an effective financial wellness program. Given the diversity of the modern workforce, customizing financial wellness benefits is essential for strategically aligning interests across demographics and driving business goals. Evidence shows that customization is the key to success. MetLife's 16 th Annual U.S. Employee Benefit Trends Study found that 60% of employees would be willing to bear more of the costs of benefits if they were given options that met their needs, and 73% say they would be more loyal to their current employer if their employee benefits were tailored to their needs. There are few off-the-shelf financial wellness platforms today that adequately address the full spectrum of all employees' financial needs. Because of this, employers should seek guidance and advice from their benefits provider or consultant to find a program that meets the unique needs of their workforce. Defining wellness The ultimate goal of a financial wellness program is to enable all employees to view and understand their financial situation objectively. Financial wellness is centered around four core principles: financial awareness, financial health, financial security and financial inclusion. While a comprehensive financial wellness assessment can help employers determine which program elements take priority, an effective financial wellness program should strive to meet all four core principles. FINANCIAL AWARENESS Just as demographics impact the type of information and services needed, demographics also determine the best communication methods. Online learning tools might work better with some employees while others might prefer one-on-one counseling or classes. Flexibility in the way information is delivered can be crucial to employee experience and overall success of the program. FINANCIAL HEALTH Like fitness goals, financial health is very much dependent on focus and consistency. Budgeting and financial planning tools can help employees manage day-to-day finances and protect against unplanned expenses. FINANCIAL SECURITY The ability to plan and protect for milestones such as buying a home or retiring is the lynchpin of financial security. The past decade has eroded many Americans' sense of financial security. A successful financial wellness program helps employees achieve financial security by bridging short-term needs with long-term goals. 3

4 FINANCIAL INCLUSION Most employees have a deep-rooted desire to take ownership of their financial situations and feel they are making wise choices. For this reason, a financial wellness platform that makes it possible for all employees from entry-level to high-ranking executives to access employer-sponsored benefits is most effective because it facilitates financial inclusion. Importance of employee benefits Since workplace benefits form the foundation of most workers' financial safety nets, the most effective workplace financial wellness programs place employer-provided benefits at the nexus of the program. By integrating information about the company's full complement of employee and retirement benefits into a financial wellness program, workers are able to maximize the value of those benefits. Retirement plans such as a 401(k) defined contribution plan are usually the most prevalent financial wellness benefit. Adding auto-enrollment or auto-escalation are helpful in increasing savings. Financial solutions such as student loan refinancing, credit monitoring services or homeowners insurance can give employees the tools they need to build a successful financial future. Voluntary benefits, such as accident insurance, critical illness insurance, hospital indemnity and group legal plans can help with unexpected life events. Group insurance products such as life insurance or disability insurance provide valuable protection. Financial well-being tends to increase with income levels, but an effective workplace financial wellness offering successfully intergrated into a larger benefits program can help workers of all income levels achieve financial security. Finding a partner Once you've decided how to structure a financial wellness program, it's time to draw up a short-list of potential vendor partners. Ideally, a partner can offer multi-channel capabilities that can support all aspects of financial wellness, especially the specific goals identified in the employee assessment. Consider the vendor's ability to integrate existing employee benefits and to deliver solutions, educational content and other resources across multiple channels. Garnering support When making the case for creating a comprehensive financial wellness program, it's important to include data-driven insights and analyses of workers' needs. It's also important to define how the program's success should be measured. Program objectives can include increased productivity, fewer absences, talent retention and timely retirement exits. 4

5 Next steps Financial Wellness: Creating a More Productive, Engaged Workforce offers a rigorous starting point for employers wishing to help their employees navigate the road to financial wellness. It is a launchpad from which deeper insights can be achieved for assessing workforce financial wellness needs, tailoring programs, engaging workers and measuring results. If you would like more information about establishing a workplace financial wellness program, please contact your MetLife financial wellness expert, or visit metlife.com/tailor and fill out the Contact Us form to have a MetLife representative contact you. About MetLife MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates, is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit 1 Corporate Wellness Services in the U.S., IBISWorld, February Metropolitan Life Insurance Company 200 Park Avenue New York, NY, L [exp0719][All States 2018 MetLife Services and Solutions, LLC