Photo by Markus Winkler on Unsplash
More employers today than ever before are bought into the value of offering financial wellness benefits to their employees.
And if you’re like a lot of executives we meet who either have implemented or are planning to implement financial wellness programs, the success of these programs is important to you. Both because you want to see your employees get the benefits of these programs, as well because you’re expending your limited resources on these programs.
But do you measure the performance of your wellness programs to see if they’re delivering on their promise? According to a 2021 Bank of America study, only 30% of companies who have a financial wellness program actually measure their success.
The remaining 70% don’t quite know if their employees are getting the value of their financial wellness programs, or how to improve them.
It’s a lost opportunity.
If you can’t measure it, you can’t improve it
- Peter Drucker
So what’s an effective way to measure the performance and success of your financial wellness (or any other type of wellness) program?
There are 5 levels of metrics that are tightly interlinked. Each layer influences the results at the next layer above it.
Let’s dive into each layer a little.
With almost any type of financial wellness program, or in fact any type of wellness program, the most fundamental metric to measure is participation.
The effectiveness of your 401(k) match program depends on employee participation. The success of your financial coaching program hinges on employee participation. The impact of your mental wellbeing program relies on employee participation.
Regularly track the employee participation rate for your financial wellness program. If its not satisfactory, work on improving it. We won’t go into a deeper discussion on how in this article, but consider your program’s value proposition, targeting, messaging, communication channels, etc.
If your employees don’t participate in your financial wellness program, no other metrics matter.
For those who are participating, usage is the next important metric to measure.
In addition to measuring whether or not users are using your financial wellness program / platform, it is important to measure how much (and how) they’re using it.
If your employees don’t participate in your financial wellness program, no other metrics matter.
Each value proposition of your financial wellness program will need to be measured for usage.
And where usage is lacking, you’ll need to ask yourself why.
You’ll likely have to rely on your program / platform vendor for usage metrics, either through self-service dashboards or through periodic reporting directly from your provider.
If your employees are using your financial wellness program (and using it enough), they’ll have an opinion on its usefulness to them. They’ll also have feedback on what is useful to them, and more often feedback on what is not useful to them or what they see is missing for them.
On a periodic basis, perhaps once a quarter or twice a year, ask them for this feedback. You can build this satisfaction feedback right into your financial wellness platform, or you could administer it using other forums and channels.
We find that the NPS methodology is a good one to track employee satisfaction with your financial wellness program. It is short, and tells you a lot. An example of the questions you could ask are:
You could follow that up with a qualitative question to get to the “why”, but sticking to just the 2 would give you and a high response rate, as well as the insights you need.
As promised, it gets trickier with the higher level metrics.
Wellness metrics, or our “Financial Wellness Score,” is essentially self-reported data by your employees on their financial reality. For your financial wellness program, this is your outcome metric. If your financial wellness program is successful, you’ll see this metric trend up and to the right.
As with any self-reported data, especially on a sensitive topic such as finances, this will be less than 100% accurate. But, administering a number of these on a periodic basis (perhaps once or twice a year) over a meaningful period of time, the Financial Wellness Score gives you a good sense of the positive impact (or lack thereof) of your financial wellness program.
Important to calculate your employees’ Financial Wellness Score are questions related to their financial situation.
We’ll shortly write a whole other blog post with the full set of survey questions. You’re welcome to administer it yourself, or reach out to us and we’ll help launch and analyze the Financial Wellness Survey for your employees. A good baseline is a critical place to start.
And finally, there are your business metrics.
If you’re like most executives we speak with, you’ll want to, or you have a manager (or their manager) who wants to, see that the impact of your financial wellness program is also seen on the bottom line.
The core set of business metrics that most companies will want to target are: absenteeism, retention, employee engagement or satisfaction, and productivity.
Let’s get one thing out of the way. You can hire a full team of statisticians and data scientists, task them with just this project for a full year, and they’ll still tell you this: it’s impossible to tell for certain how much impact the financial wellness program had on your business metrics.
They can (and will) estimate the proportion of impact using complex multi-variate regressions in a model that is full of assumptions. Which is the right thing to do for the task they’ve been assigned. But it’s not the “correct” answer. There isn’t one. Because it is almost impossible to control for all the other things that employees face and companies do in the daily course of life.
So our recommendation: Start by looking for correlation.
There is bound to be be some lag in the effect on business metrics. So look for this correlation in a staggered cycle. That is, impact of the movement in this month’s Financial Wellness Score could show up in your absenteeism and retention in six months to a year.
That's it. If you’ve made it to the end and read most of what’s above, great job! This should set you up well to start measuring the performance of your financial wellness programs.
Most programs today aren’t enough, and hence won’t move the needle for your employees’ Financial Wellness Score (or your business metrics).
At River, we’re building a holistic financial wellness platform that helps your employees truly become financially healthy. To learn more, reach out to us at hello@getriver.co.