What types of people at your school are not saving for retirement? Young employees? Low-income earners? Maybe single parents with children?
Several years ago, Linda Nilsen needed to know. As the executive director of benefits and compensation at Princeton University, she analyzed the non-savers—about half of the school’s 6,000 employees. To her surprise, there were no trends, no themes, no commonalities. These individuals represented all ages, salaries, departments and positions.
Human resources brainstormed ways to reach them and came up with a fresh approach: Instead of targeting these individuals directly, it introduced financial wellness classes—some in Spanish—for employees at all levels.
It’s no news that Americans are lousy at saving and great at spending. According to a recent poll by Bankrate.com, more than a third of adults surveyed had not started saving for retirement. Based on an analysis of Federal Reserve statistics and other government data, the average household owes $7,283 on its credit cards.
Schools typically offer financial wellness programs to employees at the higher end of the income or education spectrum. Information focuses on more sophisticated topics like investment strategies or tax planning. However, some employees can’t worry about tomorrow. They’re too stressed about today, wondering how they’re going to afford the next car payment or pay their rent.
Ground level
Some schools are starting from the beginning—the very beginning—in helping employees minimize financial stress and be more productive at work. Schools are introducing entry-level financial wellness classes that teach employees everything they need to know—from what a credit score is to saving for emergencies.
By arming them with financial information, tech tools and healthy fiscal practices, employees no longer have to struggle, living paycheck to paycheck. Investing in their future is now a reality.
What’s unusual about Princeton’s 30- to 60-minute introductory classes—which include basic budgeting—is that department heads often request them to be conducted during staff meetings.
“Those have been our most successful meetings because everyone is there,” says Nilsen. The university avoids a conflict of interest by hiring one firm to conduct entry-level classes and another to address advanced topics, she adds.
“Anecdotally, people have been able to improve their credit rating or buy a home they never thought they could,” she says. “It tells you we’re doing something right.”
Princeton’s HR department started noticing a difference after introducing online auto-enrollment for its retirement plan. Participation jumped from 50 percent to 80 percent, she says, which is really impressive since the plan doesn’t offer a matching contribution.
Changing attitudes
In 2013, Chicago State University started targeting low-wage employees and campus community members with help from a five-year, $560,000 grant from the U.S. Department of Education.
The grant’s purpose is to generate awareness about preparing for retirement, says Philip Aka, professor of political science at Chicago State.
“We’re trying to say that regardless of how much you make, you can save money,” he says. So far, the university has conducted four free on-site workshops on basic money management concepts and strategies such as compound interest.
But this effort has been especially challenging, since the school is located on Chicago’s south side, where the crime rate is sometimes quadruple the national average, he says. Tellingly, many people express the fatalistic idea that they could be killed tomorrow, so why bother saving?, Aka says.
“We’re going to try every single (strategy) within the period of this grant,” says Aka. “We want to change the fatalism.”
Age and gender
Some schools, including Lewis & Clark College in Portland, Oregon College in Portland, Oregon, are targeting various employee groups by catering to their specific needs.
Lewis & Clark is revamping its website to better appeal to employees under the age of 30, says Isaac Dixon, associate vice president and director of HR at the college.
Studies show this group is less likely to read long, technical articles about finance. “If they click on a page and see something they need to scroll, they will not read it,” Dixon says. “We’re introducing two-minute videos and other short bursts of information that link to more detailed information.”
Women are yet another segment. Generally, the school engages them in small group meetings, enabling them to listen to questions posed by others in the group and learn from their experiences, Dixon says.
Four years ago, TIAA, the college’s retirement plan administrator, developed Woman2Woman financial empowerment workshops. More than 10,000 women from colleges around the country attended the small group workshops led by female financial advisors. Over one-third later requested meetings with a financial advisor to discuss their retirement goals.
To help boost participation rates, Lewis & Clark College’s HR department conducts small focus groups and asks questions like, “What are your financial concerns?” and “What would it take to get you interested?” Dixon says.
Of the college’s 565 employees, more than 90 percent participate in the school’s financial workshops and retirement plan. A key to increased program participation is offering employee groups something they can relate to. “You have to ask end-users what would make them feel more comfortable,” Dixon says. “You need internal systems that allow you to have the kind of work segmentation data that will give you the kinds of information to vary your message.”
Providing incentives
Still, there may be another approach that crosses all boundaries—age, gender and income.
Buck Consultants is piloting an online program at Xerox in Secaucus, New Jersey, called, SavIncent. It uses monetary incentives to reward employees who engage in financial wellness activities, says John Larson, senior consultant in the wealth practice at Bucks. The program mimics successful healthcare programs that use the same approach to increase participation in wellness activities.
For example, employees who complete a budgeting course or open a savings account would receive points or a small contribution—determined by their employer—in their retirement fund. Points can translate to dollars or be used to purchase items in a company store.
“Retirement readiness plays such a large part in financial wellness planning,” Larson says. “It brings out new ways for people to save and incentivize their behavior.”
Maybe it’s time for your school to try something different. Everyone enters financial planning at a different point and brings unique experiences. But what they all share is a common need to manage today before they can plan for tomorrow.
Carol Patton is a Las Vegas-based writer who specializes in human resources issues.
