Creating financial wellness for employees via gamification

By Will Bailey

Financial wellness means different things to different people and there is no universally accepted definition. My favourite definition of financial wellness as being financially stress free and not worried about debt and unexpected expenses. The reason that this definition rings true to me is that it speaks to the personal relationship one has with their finances and applies across the entirety of the wealth spectrum.

The idea of being stress free about finances is especially prescient when one considers recent research by PWC found that 54 percent of employees say finances and money matters cause them the most stress in their lives. Therefore, any employer seeking to create a positive and less stressful working environment must provide benefits to their workforce that address financial wellness.

Getting to the root of the problem

Where does financial stress come from for employees? For many, it results from the feeling of being unprepared. In the UK, 39 percent of adults don’t feel confident in managing their money, and 11.5 million have less than £100 in savings. This uncertainty causes a domino effect, as many will reach out to friends or family members to help bridge the gaps during unexpected times. Yet many times, these external parties are also in the same predicament, living without a safety net – creating further cycles of stress and uncertainty.

So why should employers care? Beyond simply having happier employees, when people are stressed about their finances it causes significant implications on their focus and productivity in the workplace. More than 35 percent of employees admit money matters affect them for three hours or more a week. For employers, this lack of productivity has the potential to cause significant impact to the bottom line. To put this in perspective, imagine the impact to a business if over 35% of their workforce took unanticipated half days off.

Many employers recognise the importance of reducing their employee’s stress. Investment in workplace benefits – from health insurance to free gym memberships – remain prevalent in the market. However, employers still have the opportunity to invest in their employee’s wellness by including financial wellness into their benefits offering because for many employees, there is little in the way of guidance or mentoring for how to handle their finances which is their largest source of stress.

While the challenge may seem daunting, the solution is two-fold. Individuals, regardless of where they stand on the wealth spectrum, must engage in improving their financial wellness. Employers must also rethink their benefits and support packages for their workforce.

The first step and beyond

When one decides to live healthier, they will take steps to consciously engage in a plan – such as exercising, eating healthier, etc. The same principle applies to finances. Employees must engage and devise a plan to better their financial wellness. This can be done by adopting financial wellbeing tools; these can track income, understand what needs to be saved, allow goal setting, and compare current finances against goals.

The current climate has accelerated workers taking the first step in utilising such tools. A recent survey of 2,000 UK adults showed a sharp increase in the use of money management apps during the COVID-19 outbreak. This upshift came as a result of individuals seeking to gain control to better manage their finances.

While this is a significant first step, it must be built upon. Delivering financial wellness just like improving one’s health must be done through tools and apps that encourage participation and engagement via gamification, behavioral science, decision theory, and data science.

This is supported both experientially and with data. As an example, we all know someone who during 2020 has become a Peloton (or equivalent fitness tool) evangelist. They talk about their leaderboard, how much they love their favourite instructors and the community. By deploying gamification to drive engagement, in this case the One-Up Dynamic, and Community Dynamic, Peloton has seen over 450% increase in their stock price in 2020.

Further proof is shown by a study from the US Centers for Disease Control and Prevention, which showed that gaming features have immense power to keep audiences returning for gratification. Its study of youth behaviour from 1991 to 2018 revealed that respondents found video games more engaging and addictive – even more so than tobacco and television.

The same dynamics of gaming and behavioural science deployed by Peloton and many, many others (Tiktok, Instagram, and LinkedIn to name a few) can be utilised by employers to help their employees become more financially well and by reducing stress in the workplace to yield greater productivity.

The employer initiative

So, what can employers do to tackle the challenge of employee financial wellness? First and foremost, they must meet their workers at the current stage of their financial journey. Any solution for financial wellness needs to recognise that every individual has a different need. A new graduate just starting their career in marketing has different needs to their colleagues working on the factory floor. Similarly, the financial plan and goals of one working on the factory floor will be different than those in the C suite. A holistic financial wellness offering must equip all employees with empathetic information to improve their financial wellness and enable them to easily digest and engage with the information on offer.

Another important facet of any financial wellness program is trust. In order to create trust, employers must make sure that their offering is empathetic and honest. As we all know, trust is the most important aspect when dealing with something as sensitive as finances. To promote transparency, tools on offer must be accessible to the user wherever they are – whether that is via mobile or desktop, at home or on the go. It must also reflect the individual’s own situation and preferences – speaking to them directly and in a way they understand.

An easy way to create more engagement and trust in a financial wellness platform is, like Peloton, to offer community, individuals who are aware and reminded that they are among meaningfully similar people with whom they can learn, share, communicate and celebrate are more likely to engage and trust their experience. When combined with progression, allowing an individual to see and feel forward movement with each step, action or submission, always with a clear view of completion and celebration, an employee can see how the actions of people like them have led to better outcomes and will engage more readily in their financial wellness. Whether the goal is to pay off your debts, or save for retirement, being able to see that other people like you have achieved the goal drives better outcomes.

Finally, employers should consider providing access to experts. Many people want to validate their decisions with someone who is experienced – such as financial coaches or advisors. A good holistic financial wellness platform will allow employees to learn and take actions on their own whilst also providing a channel to seek expert guidance. This provides workers with security because they have access to quality help, when they need it.

The future of the workplace

As we look forward, the need for financial wellness increases. While today, 35 percent of employees are distracted by financial stress at work for more than 3 hours a week, the number increases to 50 percent when focusing just on millennials – arguably the most indebted generation. This number will continue to rise as the future workforce is faced with rapidly high costs of living – mortgages, car finances, student loans, and so on. As a result, this generation is more concerned about their financial wellness, with up to 65 percent wanting gamified experiences to help them learn about investing and portfolio management.

To keep employees happy and productive, companies must make it their duty to take care of the whole person, past the contracted working hours. Financial wellness support must be a part of every benefit scheme. As a result of this, employers can find ease in knowing productivity levels are high, while being able to retain a greater number of staff. For any business, creating financial wellness for employees is a win-win for the bottom line. They just have to ensure the experience sticks.

About the Author

Will Bailey, Chief Strategy Officer at InvestCloud, has worked for the fintech firm since the company’s founding. Prior to his appointment as CSO he moved to London to head investCloud’s European expansion. He also previously led the platform technology and product management teams at InvestCloud, and is proud to contribute to the delivery of innovative and beautifully designed solutions to improve the client communication, client automation, data analysis, data management and workflows of InvestCloud’s clients.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.