Employers are wasting money on wellbeing initiatives by focusing on information instead of helping employees to change their financial behaviour, according to MetLife.
Firms have been urged to change the "one-size-fits-all" approach to the programmes if they are to reap the benefits, as the protection provider warned providing generic financial information does not take personal situations into account and does not seek to change behaviour.
A report commissioned by MetLife and Syntoniq, entitled A Behavioural Approach to Employee Financial Wellness, reveals 36 per cent of employees admit their work performance has suffered because of money concerns.
It recommends employers engage with benefit providers to design financial wellbeing programmes and adopt a behavioural approach that is designed to motivate employees to create good financial habits.
The effectiveness of the programmes can be improved without substantial investment by focusing on behavioural techniques such as self-awareness, redesigning systems to enable good financial decisions and encouraging ongoing dialogue between staff and employers, according to MetLife.
Research among employee benefit consultants showed 75 per cent believe employee financial wellbeing programmes are the biggest challenge for the industry over the next two years.
Around 82 per cent believe the increased availability of financial wellbeing support for employees will drive product design in the group risk market.
A 2014 report from Barclays revealed corporate profits can fall by 4 per cent due to employee worries about their personal finances and that nearly two out of five employees (38 per cent) were willing to move to employers that made their financial wellbeing a priority.
Adrian Matthews, employee benefits director at MetLife UK, said: "Improving employee financial wellbeing has real value for employers and there is a strong business case for tackling the issue as financially healthy employees make for successful companies.
"Behavioural finance provides a framework for enhancing the effectiveness of financial wellbeing programmes and the report highlights how it can help businesses and their employees.
"Employee benefit providers need more insight to help drive engagement and ultimately business success and our partnership with Syntoniq has enabled us to review this business challenge from a behavioural perspective."
David Mead, chief executive at Surrey-based Future Proof, said: "This is a hot topic at the moment. If someone is very stressed, it can be caused by financial difficulties. Mental health is the way it can show itself, and it can lead to people not turning up or being less productive.
"We are really keen supporters of additional benefits that a lot of providers give policyholders access to – Royal London’s Helping Hand would be a really good example – where people can access support via their policy.
"The best policies come with packages that give people access to free help and support. The root cause can be different from the way it shows itself – but that starts the identification of the problem."
simon.allin@ft.com
