Closing the Financial Wellness Engagement Gap

A recent survey from market intelligence firm Cerulli Associates highlights a striking disparity in the financial wellness space. According to the report, U.S. Retirement End-Investor 2024, more than 90% of defined contribution recordkeepers provide financial wellness services and 71% of plan sponsors have adopted such programs. Yet at the same time actual engagement remains low, with usage rates for most resources below 20%. And while 41% of participants find their financial wellness resources “very helpful,” a majority (57%) express neutral sentiments.

The gap between availability and engagement suggests the need for a more targeted and tactical approach. To help increase utilization rates, plan sponsors could consider implementing several strategic steps.

Tailor your offering. Gather input from employees through surveys, focus groups and other modes of data collection to understand their specific financial wellness needs, preferences and challenges. This feedback will help tailor programs to align with the organization’s culture and address the unique priorities of different employee segments.

Address immediate needs. According to Cerulli analyst Elizabeth Chiffer, around 40% of participants see contributing to their retirement savings as a “sacrifice.” Before building for the future, many employees may need to address short-term financial challenges. Providing resources such as debt management assistance, short-term financial planning workshops, access to financial advisors and flexible compensation options can help workers achieve stability and peace of mind, enabling them to focus more effectively on saving for retirement and other long-term financial goals.

Offer life-stage-specific resources. Provide resources tailored to different life stages and events such as buying a home, starting a family or planning for retirement. Customize these resources with detailed guides, checklists and calculators that help employees navigate each stage, ensuring the information is practical and actionable for their specific circumstances.

Spread the word. Use multiple channels — emails, newsletters, webinars, videos — to inform participants about available financial wellness resources. Clearly communicate the benefits of the tools you provide, explaining how they help with budgeting, debt reduction, managing investments and retirement planning.

Mobile-ize access. Provide mobile applications that offer financial wellness tools and resources. This allows participants to more effectively manage their finances on the go.

Integrate with onboarding. Incorporate financial wellness discussion into the onboarding process for new hires, ensuring they’re aware of available resources. This could include introductory sessions on the value of the financial wellness tools provided by the company, setting the stage for long-term engagement.

Use visual aids. Use visual content to break down complex financial concepts and show the benefits in an easily digestible format. Infographics can illustrate statistics such as increased savings rates or reduced debt in a more accessible way, especially for participants with less developed financial literacy.

Incentivize participation. Use gamification and offer perks such as gift cards for completing financial wellness activities. Incorporate financial trivia or a companywide rewards system to encourage sustained involvement.

Closing the engagement gap requires meeting employees where they are on their personal finance journey, while delivering customized support that addresses their specific challenges and reflects their unique lived experiences. By doing so, plan sponsors can foster a more financially secure, satisfied and successful workforce.

• https://www.cerulli.com/press-releases/only-24-of-active-401k-participants-feel-very-confident-in-maintaining-current-living-standard-in-retirement 

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