Why Employee Benefits Don’t Always Work (and How to Fix It): Lessons from Walmart

We’ve covered in depth the numerous benefits of employee wellness programmes. However, in the real world, not all programmes work as intended. In this issue, we delve into a case study of the US retail giant Walmart's financial wellness initiative to examine how staff do not always engage with programmes as expected (or desired), why this matters, and how to fix it.

The Walmart Financial Wellness Experiment

In 2017, Walmart, with its massive workforce of 1.5 million people, implemented a financial wellness programme. A key component of this initiative was an earned wage access (EWA) app, allowing employees to access a portion of their earned wages before payday. This app also included budgeting tools and a savings feature, aiming to provide a holistic approach to financial wellness.

A year after implementation, Walmart conducted an analysis of the programme's usage. They examined usage for 269,000 new hires over a seven-month period, as well as analysing turnover rates. The results were both enlightening and surprising.

Initial Findings: A Tale of Two User Groups

The good news was that employees loved the EWA offering, ranking it second only to the company's 401(k) retirement programme in terms of popularity. However, the analysis revealed two distinct user groups with different patterns of engagement:

Partially-Engaged Users: One group regularly used the offering to access cash only, ignoring the other financial wellness features. Of this group, around 50% quit their jobs within the first six months of employment.

Fully-Engaged Users: The other group of employees combined accessing their wages before payday with frequent use of the EWA app’s savings and budgeting features. Significantly, only 30% of these employees left within the same six-month period.other financial wellness features. Of this group, around 50% quit their jobs within the first six months of employment.

Why This Matters: The Impact on Employee Retention and Wellbeing

Walmart found a 20% difference in retention rates, depending on usage. Why? First, we need to dive into research on financial wellness. Financial analysts suggest that employees don’t actually want quick access to cash, but rather stability and financial peace of mind. In fact, findings from Ernst & Young report that 20% of employee turnover can be attributed to financial stress. This means programmes that address money concerns have the potential to reduce turnover by 20%. And this is exactly what Walmart found.

How to Make Your Wellness Programme Successful

The Walmart case also demonstrates that making a financial wellness programme available isn't enough. Only when programmes are fully utilised can they address root issues and realise their intended outcomes. And this lesson isn’t just applicable to financial initiatives. Lessons from Walmart's experience can be applied to various types of employee wellness initiatives. To maximise the impact of these programmes, companies should:

1. Monitor Usage Patterns: Regularly analyse employee engagement with different aspects of wellness programmes to identify trends and potential issues.

2. Encourage Holistic Use: Educate employees about the benefits of fully utilising the programme and encourage them to use all features, not just the most immediately attractive ones.

3. Provide Comprehensive Education: Offer resources and tools to improve employees' understanding and management of their wellbeing, be it financial, physical, or mental. For instance, a mental health programme could also include information on the benefits of healthy eating.

4. Consider Incentivisation: Some platforms employ gamification and tiered reward systems to encourage engagement, especially when content may not seem appealing, such as completing financial education.

5. Customise and Iterate: Recognise that a one-size-fits-all approach is ineffective. Be prepared to adjust programmes based on employee feedback and usage data.

The Bottom Line

When implemented thoughtfully, employee wellness programmes can be a win-win for both employers and employees. They offer a solution for companies to improve retention and productivity while providing workers with tools to enhance their overall quality of life. However, the key to success lies in promoting comprehensive engagement and understanding that these programmes aren't simple "plug and play" solutions. They require ongoing monitoring and a commitment to holistic employee wellbeing. The Walmart case study proves the true value of wellness programmes lies not just in their availability, but in how effectively they’re utilised.

By taking a more nuanced approach to implementation and engagement, companies can unlock the full potential of these initiatives, boosting both employee satisfaction and business outcomes.

Recent Events

HR Indaba | Sandton Convention Centre