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Now, I know, that might be a provocative statement and it’s meant to be. That’s because there is something that the behavioral scientists have known for years about engagement with health initiatives that they haven’t shared with us in the financial space.
Curious? Want to know what it is? Then, read on!
With any type of corporate wellness initiative, we, as advisors and HR professionals, are always asked to provide some sort of return on investment (ROI) that shows that the benefit is worth the cost to implement. Looking through this ROI microscope tends to make it seem that any wellness initiative, either health or financial, is not successful at engaging participants. Which leaves management questioning if these initiatives are worth the cost and the effort in the first place.
But is this truly a good indicator of success?
Changing our habits is a really challenging task. Just think back to a time when you tried to implement a change to your habits, whether it be financial, or health based. When did you finally decide to make a change? How long did it take you to make this change? Do you know what process you went through? Did it stick?
What I have discovered over the past few years is that many of us in the financial services industry don’t fully comprehend the processes we go through to get us human beings to change our habits in the first place. We’ve learned about behavioral finance and nudge theory, which are helpful, but don’t fully explain what it really takes to get someone to want to change their behavior and start taking action.
In fact, most of our financial wellness programs are structured under the assumption that participants are ready to take action to make a change to their financial behaviors. When in fact, at any one point in time for any specific risk behavior, only about 20% of us are truly ready to make a meaningful change to our habits. (Sholl, 2019)
Which means when it comes to doing the things that will generate an ROI in financial wellness programs, such as watching the videos, taking the courses, saving our money, attending the webinars, etc. most of us are not engaged, or ready to take action. At least not yet.
I have been in the financial services world for over 25 years, and it wasn’t until I decided to go back to school to become a Board Certified Health & Wellness Coach that I truly connected with what is happening with participation in our financial wellness programs. Why when we rolled these programs out that participants would seem excited to have them, yet when we reported back on the participation numbers, we were disappointed that we only had about 5% to maybe 15% participation. I felt like I was hitting my head against the wall trying to get employees to engage in these financial wellness programs and admittedly, a bit embarrassed that it seemed like we hadn’t succeeded in the rollout of the program.
Little did I know then that we had succeeded. And not in a small way. We had succeeded in capturing exactly the number of participants that we could at that point in time.
There is a Still Lot to Learn About Human Behavior
They teach us a lot of things in the financial world, but unfortunately, we are not taught a lot about human behavior. This is changing, which is a good thing, but we have so much more to learn.
To help you understand this a little better, let’s do an experiment here – I want you to think about some not so good habit that you have wanted to change or maybe a good habit you decided to implement. What process did you go through? How long did you think about this habit before you did anything about it? What did you do to prepare yourself for changing your habit? What did you research and analyze before you put a plan together to address this habit? How long was it before you even realized that you needed to do something about this habit it in the first place? What made this positive habit stick with you and become a permanent part of your life?
If you can’t think of anything, and you happen to have short sticky ones at home, aka children, think about trying to get them to change or take on a habit, such as eating their vegetables or cleaning their rooms. How receptive were they initially? How long did it take you to get them to comply? Or are you still working at it? I have young adult children, and unfortunately, I am still working on them!
Building a solid financial foundation is about creating better financial habits. And no matter how much we like to tell participants in retirement plans about the great reasons they should want to create these good habits, only a handful of these humans are actually ready to do so. But that doesn’t mean they aren’t thinking about it.
In fact, there is a lot of thinking and preparation that goes on behind the scenes before someone is truly ready to take action on any behavior change. Studies show as well that the more prepared someone is to make a habit change the more successful they are in maintaining meaningful change. So, the question is, how do you get an ROI on something that you cannot quantify?
The Six Stages of Change
Well, before we go there, let’s first explain the process of change and the six stages of change people go through in order to make a positive habit stick in their lives. This process was coined the Transtheoretical Model of Change (TTM) in the 1980’s by psychologists Dr. Prochaska, Dr. DiClemente, Dr. Norcross, and their team of researchers. They discovered that we humans go through six stages when we decide to make a change to any one habit. (Prochaska PH.D, Norcross PH.D, & DiClemente PH.D, 1994)
The first stage is Precontemplation, where we may not even know we have a habit to change, we are in denial that we have a habit to change, or we haven’t decided to change a bad habit we are aware of.
Next is Contemplation, where we recognize that we have a habit to change, but we have not decided that we want to do anything about it, at least not yet.
Then comes Preparation. Here we have recognized that we have a habit we want to change so we start collecting data and making plans to change this habit.
In Action, we have a plan and are executing on the plan, but we have not quite made it a habit yet, which means we could easily slip back into Preparation or an earlier stage.
In Maintenance, this change in behavior has become a habit and we are working toward maintaining the habit and making more progress.
Finally in Termination, the habit has become a permanent part of our lifestyle.
According to Dr. Prochaska and his team, only about 5%-15% of people are in Action and Maintenance at any point in time for any particular risk behavior. So, if you believe that poor financial habits are a risk behavior, which there’s an argument to say they are. Then it seems logical that only about 5% - 15% of participants are going to be ready to fully engage in a financial wellness program at any one point in time. And that is if they have identified that this is the habit they want to work on. I would love to say that we only have one thing in our life that we want to change, but that would not be a true statement, not by a long shot!
Engagement is Happening!
The most important thing to understand about the stages we go through to make a change is that simply moving from Precontemplation to Contemplation is a success. It means that the person has identified that there is something to work on. Unfortunately, it is really hard to get an ROI based on someone’s thoughts, but that doesn’t mean that your wellness program hasn’t impacted them or engaged with them at some level. The mere fact that they moved up a stage in their thinking demonstrates that it has.
This also means that our programs not only need to be focused on those that are ready to take action to build better financial habits, but they also need to be focused on bringing along the rest of the humans to a place where they are ready to start taking action to improve upon them. That means that all wellness programs, not just financial wellness programs, need to be evergreen in nature and have a multi-dimensional approach.
I think we all knew that. This is not an earth-shattering revelation; it just puts more emphasis on holistic participant engagement strategies and having more realistic expectations of what success looks like for our wellness programs. Which I will discuss in further detail and provide some options for you to think about in the next two articles.
In the meantime – I invite you to consider the notion that our wellness programs are not broken. Instead, think about adjusting your strategy in deploying wellness programs and your expectations of what you deem a success. Because these programs are desperately are needed, and you are most likely experiencing more success than you think you are.
References
Sholl, J. (2019, June 6). Fitness Tips | Healthy Habits/Goal Setting. Retrieved from Experience Life by Life Time: https://experiencelife.lifetime.life/article/the-stages-of-change/
Prochaska PH.D, J. O., Norcross PH.D, J. C., & DiClemente PH.D, C. C. (1994). Changing for Good: The Revolutionary Program That Explains the Six Stages of Change and Teaches You How to Free Yourself from Bad Habits. New York: William Morrow and Company, Inc.
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