S4 E9: Financial Wellness in Focus: Helping Employees Find Peace of Mind


Podcast November 27, 2023

In this week’s episode of Human Solutions, host Pete Wright explores the pressing issue of financial wellness in the workplace with Kirsten Hunter Peterson from AIM partner Fidelity Investments. “Finances can be really stressful,” she says, “We want you to feel good about your money.”

 

With inflation on the rise and record levels of household debt, financial challenges weigh heavily on employees’ minds. This stress can take a toll on productivity, focus, happiness, and retention at work. As Kirsten explains, an employee’s financial health impacts not just their personal well-being but also the health of the business. Pete and Kirsten dive into several facets of the financial wellness puzzle. They discuss the scope of financial stress facing workers today, learn why employees look to their employer for help, and how HR teams can partner with experts to provide useful resources without becoming financial gurus themselves.

 

At a time of growing uncertainty, this episode explores tangible ways employers can help their workforce feel empowered, supported, and financially secure.

 

Links & Notes

Transcript:

Pete Wright:
Welcome to Human Solutions, simplifying HR for people who love HR. From AIM HR Solutions on TruStory FM, I’m Pete Wright, and this week we’re talking all about your money. Okay, maybe we won’t get into specifics about your money, but when we look at the broader economic headlines, it’s easy to see how money might be on the brain these days. So let’s talk about financial wellness. What is it? Why does it matter? And if you’re in HR, why can a healthy financial wellness program enhance the overall wellbeing of your teams? Kirsten Hunter Peterson from AIM partner Fidelity Investments is here to talk about hrs role in helping their teams improve their financial wellness. Kirsten, welcome to the show.

Kirsten Hunter Peterson:
Thank you, Pete. I’m so happy to be here.

Pete Wright:
I am thrilled to have you here. And just in terms of a setup, one of the most interesting things that I’ve seen in the conversations that we’ve had this season on the show tends to be about how HR is being tasked with more than ever, in terms of employee wellbeing. We’ve talked about everything from mental health counseling. We’ve talked about drug and alcohol counseling. We’ve talked about a lot of things that 30 years ago the workplace would not have touched. And financial wellness is another one that seems to keep coming up as a topic that employees are counting on their employers to help them figure out. So as a way to set the table for this conversation, share with us what financial wellness means. And obviously you’re not here to pitch Fidelity, but Fidelity has a point of view. How does Fidelity see financial wellness in the workplace?

Kirsten Hunter Peterson:
I’m so glad you asked that, Pete, because I think a lot of folks think about financial wellness as just being how much money you have. And it’s not about that. It’s really about how you feel. We want you to feel good about your money, we want you to feel like you’re on track with your goals, and that’s going to differ person to person. So it’s really about having peace of mind or working towards and taking steps to give yourself and your employees peace of mind. That’s something that everybody can aspire to.
And at Fidelity, we focus on four key areas that contribute to someone’s financial wellness. The first one is spending, so knowing what’s coming in, what’s going out on a monthly basis. The second one is debt. The third one is around protection. So that’s things like insurance. And then lastly, savings. So that could be retirement, but as we know, there’s a lot of things in life we have to save for. So that’s a really important bucket too.
And in terms of why I think employers are getting involved right now, people’s financial lives have become a lot more complicated, and with that it becomes more challenging to navigate personal finances. Some of the factors that are contributing to this being top of mind right now is inflation and increasing costs of living, especially in certain areas of the United States and even globally. Here at home and in the US we have record levels of household debt. So that’s putting even further constraints on people’s wallets.
And then another important factor that sometimes we gloss over is that many people out there don’t have the financial knowledge to feel confident. And in fact, only about a third of US adults have strong financial literacy skills. So we know people are dealing with really tough financial situations. Sometimes that’s as fundamental as making sure ends are meeting at the end of the month. They don’t know what to do and they don’t know how to take the next step to address those challenges. And so I think that’s also contributing to why financial wellness is such a big and important topic right now.

Pete Wright:
I’m super embarrassed to say this out loud, but I think it dates me that when I went to high school, a required class was personal finance, understanding how finances work in the household. And now my kids, it’s optional. They can choose just, “You know what, I don’t don’t need to take that class. It’s okay.” And that I feel like gets to that last point, financial literacy and also potentially leads to what I think we’re unveiling here, the symbiotic relationship of HR work and employees understanding overall financial wellness as part of the bucket of all of the things that we’re trying to help employees improve in their lives. From your perspective and what you’ve seen working with your clients, how do finances impact employees’ overall wellness?

Kirsten Hunter Peterson:
That’s such a good question. Finances, as we know, can be really stressful. We can all relate to a situation where we have felt unease about money or an expense. At Fidelity, we’ve actually recently conducted research on what causes stress across different areas of people’s life. That’s finances, that’s with their health at work and also in their personal life. And from this new research, we see some of the biggest stressors right now coming from inflation, cost of living. So those everyday financial needs, making sure ends are meeting. Another top stressor we see is around being able to meet your long-term financial goals like retirement for example. And I think these two stressors are connected because if so many folks out there are struggling with just the everyday, it can make it really difficult to then simultaneously focus on saving for your long-term future as well.
So when we take financial stress or really stress of any kind, we see it manifesting in different ways throughout our lives. Maybe it’s keeping you from sleeping well, maybe it’s contributing to health problems. Maybe it’s showing up in your life, like in your relationships or your friendships. Maybe it’s even showing up at work. And this was a really interesting takeaway from this research. We didn’t just ask about what was causing stress, but we also asked which stressors were impacting employees’ ability to show up at work as their best selves. For example, eight in 10 people said that inflation and cost of living was causing them stress. Half of those folks said that they were bringing that stress to work. So that means that they may be distracted at work, maybe they are finding it difficult to focus or feeling unproductive at work. So stress can impact productivity and also impact employees happiness and satisfaction with their job or at their organization, which as we know may lead to higher attrition rates.
So what I really want to say here is all of these things that are contributing to employees’ wellness and wellbeing can impact an employer’s bottom line. So for all of the HR professionals out there, our big takeaway here is that finances obviously play a big role in your employees’ health, but also in the health of your organization.

Pete Wright:
I knew of course, that you were going to say something like that. I just had no idea the scope and scale of the impact that individual employees were dealing with to the level of eight and 10 having the stress and four or half of those are bringing it to work. And I can see how just in terms of productivity, if you’re stressed at work, I can see you might make decisions about how you do your job and how you choose to apply your time, even when you’re on the job to dealing with your financial stress. And that seems like a really direct bottom line impact. How does this play out when it comes time for employees to ask for help? Did your research get into any of the, do you know who to turn to for assistance kind of questions?

Kirsten Hunter Peterson:
Yeah, that’s a great question as well. So finances we know are causing a lot of stress and it can also feel really scary, right.

Pete Wright:
And isolating and yeah, right, and I imagine it’s not something you’re eager to say, “Hey boss, I’m having financial problems.”

Kirsten Hunter Peterson:
Absolutely. Finances for so many people can feel like the monster under the bed that they just don’t even want to look because they don’t want to see what might be bad or uncertain. And a lot of the financial help that has been historically available doesn’t always feel accessible to everyone. Things like jargon or feeling like you might have to pay fees. So employees are actually now going to a source where they already get a lot of support and information and that’s their employer and they’re proactively asking for financial help.
Now, organizations out there for so long, many decades, they’ve been providing support for long-term financial goals, mainly retirement-

Pete Wright:
Yeah, sure.

Kirsten Hunter Peterson:
… through a retirement plan like pension or a defined contribution plan. But now we’re seeing because of all the trends that we’re talking about that that long-term support might not be enough for employees’ holistic financial wellness and total wellbeing. A lot of employees actually need more help with those foundational aspects of financial wellness. Think creating a budget or managing their debt or even saving for emergencies, setting up that emergency savings account. In many cases, we see employees who don’t have a solid footing in these foundational areas. It can actually keep people from saving for retirement, from saving at sufficient rates and leveraging that great employer provided retirement benefit that is table stakes for so many employers and their employees.

Pete Wright:
What are HR organizations doing? It seems like we’ve got… Our HR pros who are listening to this are like, “I’m already expected to be a jack of all trades. My job is to come in and be expected to know where everything is. How can I be expected to integrate a program that now helps with this completely new area that we’re not accustomed to dealing with?”

Kirsten Hunter Peterson:
You’re so right Pete, and that is a sentiment that I hear almost every day from HR professionals. They’re the ones who are on the front lines of meeting the needs of employees and addressing these very real concerns. And I would say particularly over the last three and a half years, really since the pandemic, the evolution of what is considered in scope for HR departments has expanded dramatically and it can feel really overwhelming. One example I point to is that we find in the research that a top priority for employers this year was improving employee wellbeing. Now that’s not just a priority for the HR department or the talent group. That’s across the entire business. These are strategic organizational priorities. I don’t know how many of us would have anticipated that kind of evolution where the HR department is being risen up to cover so many different things five years ago or 10 years ago.

Pete Wright:
The timescale is the operative term there. Over three years, we are seeing such a tectonic shift in expectations.

Kirsten Hunter Peterson:
Absolutely. I mean, HR professionals, let’s be honest, have a ton on their plate and many of them have taken it in stride and thought of solutions like adding new benefits to their benefits packages or their total rewards program over the last three and a half years really since the pandemic. But they can’t be expected to be an expert on everything. And I would say particularly when it comes to employees’ finances and financial wellness, HR shouldn’t be an expert in this area. This is where I would encourage folks to really lean into their retirement providers and/or financial wellness service providers to play that role. They are trained professionals working in this space and they are happy to take that work off your plate. That is their job.

Pete Wright:
So when employees are coming to their HR folks, and to your point, to their financial wellness outsourced experts, what are they looking for specifically? Are they coming because they’re already in trouble with debt or are they looking for the more mundane, I just need to learn how to manage my finances better? What’s the scope of requests? Do you have a sense of that?

Kirsten Hunter Peterson:
Well, in keeping with the theme of our last question, I would say the scope is very broad-

Pete Wright:
Every thing, right?

Kirsten Hunter Peterson:
… and ranges from… Exactly what folks want to hear. It ranges from those fundamentals, like I mentioned, budgeting, managing debt, saving for emergencies to the other side of when I’m in retirement maybe how should I think about spending my money? How should I think about creating income streams? Specific topics that are getting a lot of attention right now are on how do I pay down my high interest credit card debt or what are some strategies that I can look at? And that shouldn’t be a surprise because household debt is at an all-time high.
Another topic we hear a lot about is should I rent or should I buy? The housing market and the rental market are both extremely challenging right now. And so that is a specific topic people are looking to. And it’s even questions like, how much should I be saving for retirement amidst all of my other financial priorities and should I think about saving at different levels throughout different phases of my life? So those are some of the key more specific topics that employees are going to their HR departments about.
I’ll also say this fall, one of the biggest topics, problems, questions folks are getting is around student debt. And that’s because at least for folks who have federal student loans, they have not had to repay those loans for the last three and a half years. And those repayments are starting or have started-

Pete Wright:
Sure.

Kirsten Hunter Peterson:
… as of October. So any employee out there who has federal student loans is probably thinking right now, “How am I going to free up money in my budget to repay that monthly debt? Should I be thinking about other repayment strategies that could be better for my situation? Should I think about consolidation or applying for federal programs?” This is a really timely challenge for folks and something that employees are going to their HR department’s about and also coming to Fidelity about.

Pete Wright:
It’s an interesting thing, watching the switch get flipped in October. It was so great to have a little space during COVID to not have to pay those back, but who knew that it would come back on in a period of high inflation and increased economic uncertainty? I could see why those questions are bubbling up to HR and to Fidelity. This economic uncertainty is one that I think is a button to push, but also a button that gets pushed differently depending on the kind of organization you run. I know we have manufacturing organization partners, we have digital partners, we have all kinds of partners, but my hunch is you don’t even offer a one-size-fits-all solution. What do you recommend organizations… How do you recommend the mental model for organizations to think about what sorts of services best fit their teams?

Kirsten Hunter Peterson:
Really great question, Pete, and I think what you’re getting to is that no two companies look alike. Employees all have different needs. And so we have to keep that in mind when thinking about the type of information that we’re delivering in terms of topics or even channels. So how we’re actually reaching employees.
For HR professionals out there, you might notice certain trends based on the industry that you’re in or groups of employees that you might employ. Think about do you have a lot of young employees or more tenured, more mature employees who are thinking about retirement? Maybe you employ a lot of women, maybe caregivers and even first generation employees who might not just be thinking about financial planning for themselves or their immediate families, but maybe for their extended families and even communities that they’re supporting as well. Employees are all different. They have different lives. We have different responsibilities and goals that contribute to how we think about our money and the decisions that we make. So it’s critically important to offer a variety of resources so that everyone can benefit in some regard.
And so when we’re thinking about the actual resources that can be delivered, that can come in the form of articles, maybe workshops, that could be in person or virtual. Resources like tools and calculators, especially when thinking about student debt or that question of should I continue to rent or maybe buy a home? All of this variety in resources is really, really important to make sure that you’re delivering help in a way that makes the most sense for your employee population in general and your individual employees.

Pete Wright:
I was talking to an HR manager just last weekend at an event, and they were so frustrated because one of the resources that they offer as a benefit to all their employees was paid account access to Mint, the financial tool from Intuit. And Intuit announced recently that their canning Mint, it’s going away. And he’s saying, “I don’t know, now I have to go search again.” There are now, “What tool do I replace Mint with?” It had a unique set of features and now he’s in research mode again. That is an interesting thing, that you have this benefit that’s dedicated to financial wellness that’s helped a lot of people in the company and is going away not for any fault of their own. And it puts again, what we were talking about earlier, the onus, the responsibility of finding the best tools on people who don’t necessarily have the expertise to do that job, but in a small company, what do they do?

Kirsten Hunter Peterson:
Pete, that’s such a timely question you’re getting, and I saw that in the news as well. When I think about the types of services that are really popular and valued by employees, I’m thinking about ease of use and convenience, and also that personalization factor. So aggregating information from different sources so that people can see their entire financial picture in one view, don’t have to go to a dozen different places. So for HR professionals out there that are thinking about the best types of financial wellness services to offer, I would think about the employee and what is going to be convenient and easy for them to use, and also potentially around that aggregation factor as well.

Pete Wright:
I want to switch to a mood of optimism a little bit, if I may, right? We’ve talked about all of the signals that things are hard and it’s economic uncertainty and all of that. And we opened this conversation with how long it has taken employees and HR teams to figure out how to expand the way they think about financial wellness beyond just long-term solutions. So let’s take as writ that it has taken a while for us to kind of wrap our heads around what we need to do to best support financial wellness programs. What gives you a sense of optimism that we’re doing things right, that we are actually helping the people who need it in terms of building workplace plans that support financial wellness?

Kirsten Hunter Peterson:
I kind of love that question, and if it’s okay, I’m thinking back a few years because workplace plans have evolved quite a bit over the last decade, decade and a half maybe to make it easier for people to enroll, to get on track with sufficient savings rates as more choice has shifted to the employee. And there’s been so many great innovations like auto solutions, for example, auto enrollment, auto increase, auto escalation programs,. And then even for folks who are living in retirement, there’s been innovations around that accumulation phase, retirement income solutions, that type of thing. And we keep talking about there’s still a lot of obstacles for many people to be able to save at recommended amounts, and there’s so many pressing things that can get in the way of that, like paying bills, putting food on the table, making sure you’re making your monthly debt payments.
Now at Fidelity, we started to notice these trends many years ago, and that was actually the genesis of us creating financial wellness resources for employees because a lot of workplace benefits weren’t out there in this space, and employers hadn’t been involved in this space either. Their goal was to prepare employees for retirement, and frankly, they were doing a great job, but it can take a long time for trends to be recognized and addressed and then scaled and really become part of the mainstream. And part of the reason why that’s happening right now is that financial challenges have just become such a large part of so many people’s lives.
But on the flip side, on the optimistic side, while it might feel like it’s taken a long time, I am so encouraged by the amount of interest and support that we are seeing from organizations. They are proactively investing in these financial wellness programs because they want their employees to have the information they need and be confident making good financial decisions, ultimately in the hope that they can reach financial freedom and also retire on their own timeline, on their own terms and with dignity. So I’m really, really encouraged by what I’m seeing proactively from employers out there.

Pete Wright:
Yeah, it seems like especially over the last three years, the rate at which employers are flipping the switch on new programs is… I mean, it feels like it’s becoming… So we have healthcare, we have general wellness programs, and now we have financial wellness, and that’s just part of the program. It’s our expectation.

Kirsten Hunter Peterson:
I think part of what’s changed too over the last few years is that we are beginning to recognize that wellness and overall wellbeing is comprised of so many different areas of someone’s life. It’s not just your physical health, it’s also your emotional health, it’s your mental health, it’s your financial health. So HR departments in particular have kind of spearheaded this idea that if we want a workforce that feels well and has high wellbeing, we’re on the front lines of that. We have to create different benefits, different support systems and infrastructure to be able to make sure that our employees are well and that they have the resources they need at the times when they’ll need it.

Pete Wright:
As much as you work with employers who are figuring out what their programs are, let’s just run through 8:00 AM day one. HR pros sit down at their desk, they’re looking at their financial wellness programs. What do you want to encourage them to make sure they’re not missing from their general programs? What are the top three that you’ve got to get right?

Kirsten Hunter Peterson:
Well, I would say start with the retirement plans. Then thinking more specifically around financial wellness, I would make sure that you have those fundamentals covered. So budgeting, managing debt, saving for emergencies, and then on the backend, how are we going to support our employees into retirement and through retirement.
It’s really important for HR professionals to think about the specific or the key challenges of their unique workforce. So for instance, if you notice your employees are struggling with healthcare expenses, medical bills, think about something like an FSA or an HSA. If you notice that your employees are struggling with student debt, think about different workplace benefits in that regard. Similar with emergency savings, similar with caregiving support. The great thing about a lot of these financial benefits are that they also support employees’ overall wellness and total wellbeing, but you have to be offering the right benefits for your workforce, and that differs organization to organization.

Pete Wright:
Well, and you said workshops and I keep thinking workshops, workshops, workshops. What a great opportunity for HR to level up by teaching how to best use the plans that you do offer. And that’s really the bottom line, I think for HR pros, is figure out you know what you offer. Make sure your teams and your employees know exactly how to use it best.

Kirsten Hunter Peterson:
Absolutely, and I haven’t talked too much around engagement, but benefits are only as great as the people who are using them and benefiting from them. So if you’re offering something that is really out there to help your employees, but they’re not using it or they’re not getting the value, that’s something to think about as well. And part of it might be the content you’re delivering is great, but maybe you’re not delivering it in the best way for those employees. So thinking about engagement and delivery of financial wellness programs, employees need relevant information in a way that makes sense to them and delivered at the right time.
So Pete, for some folks workshops might be the best thing. For other folks, maybe it’s an online experience, maybe it’s a mobile app where they can educate themselves. One thing that I’ll call out is that a lot of folks like to learn on their own, but they want to speak with someone before they actually take the next step or make a decision. So it’s really important to not just offer a variety of financial wellness topics and resources, but really thinking about the delivery and the channels that you’re reaching employees with is just as important.

Pete Wright:
It’s all TikTok all the time. That’s what I’m hearing you say, Kirsten, right? Just TikTok.

Kirsten Hunter Peterson:
For some people, yeah.

Pete Wright:
Everything should be on TikTok. Yeah, be ready. Be ready for the TikTok financial wellness program.
Kirsten, this is fantastic. I know we’re coming up on, it’s got to be your favorite time of year, right? January-

Kirsten Hunter Peterson:
Oh, absolutely.

Pete Wright:
… financial wellness month. I mean, is there a part of the festivities? Is there cultural stuff I need to know about? What kind of lights do I adorn my house?

Kirsten Hunter Peterson:
Well, if you’re like me, we keep the holiday lights up well through January, and part of that is because I’m in Boston and it’s just so dark here. But now, to your point, January is financial wellness month. So now in this timeframe, it’s great to consider offering access to financial wellness tools and encouraging your employees to use these tools. A lot of people out there think about that January timeframe as a great time for New Year’s resolutions. Many of those are financial. So get ahead of your employees who might be setting those resolutions or encourage them to set them. And Fidelity will have a wealth of resources available to people during January, but also through the whole year. So come and check them out.

Pete Wright:
Outstanding. We’ve got links in the show notes. And have you ever considered just like a cake or cupcakes? You could just bake $5 in a cupcake, and that’s a financial wellness cake. I’m just blue sky ideating here, Kirsten. You can take these ideas. They’re yours. Whatever you need to do. Financial wellness cakes, probably won’t see them on the website either, but it’s good idea.

Kirsten Hunter Peterson:
Well, you never know you. That is your idea come January if you see it.

Pete Wright:
Hit the kitchen, everybody. Kirsten, this has been a real treat. Thank you so much for hanging out with me and teaching what is going on in financial wellness programs. It’s really great.

Kirsten Hunter Peterson:
It’s been such a pleasure. Thank you, Pete, and thank you to everyone listening.

Pete Wright:
Absolutely. Thank you everyone for downloading and listening to the show. We sure appreciate your time and your attention. Look for those links on the website or again, swipe up in your show notes and you’ll see all of the links and you can ask us questions. We’ll get questions to pass guests, and we’ll get them answered right on the show. So send us a note. We’d love to hear from you. On behalf of Kirsten Hunter Peterson, I’m Pete Wright, and we will be back right here next week on Human Solutions, simplifying HR for people who love HR.

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