Financial wellness programs at work: A remedy for stress and a path toward financial security
Economic upheaval is forcing employers to rethink their role in supporting the financial health of their people, heavily impacted by unrelenting inflation.
Companies seem aware of their responsibility, along with the benefits of a financially fit workforce: 95% are feeling responsible for employees’ financial wellness. And 98% agree that employee financial wellness has a direct impact on their organizations, most commonly on productivity, engagement, and turnover.
What employers can do to support the financial health of their people
Survey data uncovered that companies are not supporting their workers substantially. Only 45% of employees agree that their employer is doing enough to improve their financial wellness. This is more encouraging than what Gallup recently found, that fewer than 1 in 4 U.S. employees feel strongly that their employer cares about their well-being. Either way, there’s a lot of room for improvement in the current state of monetary incentives and financial support that are offered to workers.
Employers should take note that looking for a higher-paying job ranks third on the list of inflation-coping strategies, especially in light of unemployment rates staying low despite job cuts. Regardless of headcount reductions taking place, business leaders remain concerned about hiring and retaining talent, PwC reports.
Here are the key takeaways for employers on what they can do to better support the financial health of their people, and guide them into a more secure financial future.
Match benefits to different needs of a multi-generational workforce
Getting financial wellness benefits at work is important for 77% of employees. With 73% getting them, there’s still a gap to be closed. But, one size doesn’t fit all as different age groups need different things.
The majority of employees across generations have chosen retirement planning as the most sought-after benefit. However, delving deeper into the data, contrasts in priorities of different generations have emerged. For example, only Gen Z ranks meal allowances in the top three, while only Millennials picked financial coaching and advising. As for Baby Boomers, they differ from other age groups in prioritizing medical care planning, while in open-ended responses they expressed the desire for benefits such as commuting funding, job performance reward, and cryptocurrency education and pay.
Moreover, getting guidance from their employer on monthly spending strikes a chord with younger employees, with 62% of Gen Zers finding this important; as opposed to only 37% of Baby Boomers finding it important.
As high as 80% of employees prefer additional benefits over a pay increase. And going a step further and tailoring a benefits package to the specific needs of a multi-generational workforce can level up its value.
Provide training and education on financial literacy and money management
Less than 50% of employees are receiving training on money management at work, while only one-third gets training on financial literacy. Though a low level of financial literacy was a top contributor to financial stress and anxiety even before the pandemic, a majority of employees still don’t get the financial guidance they need.
Over two-thirds of employees said that they felt safer and more secure thanks to financial wellness training they got at work. Improving financial literacy in the workplace can relieve employees from excessive stress and help them create a more positive headspace. Companies can contribute to financial literacy of their people with a plethora of resources and initiatives, such as courses, coaching, training sessions, apps, and more.
Help employees stay on track with their financial goals
The research unveiled a deep financial insecurity: Less than half of employees (49%) feel they’re on track to meet their financial goals and retire by their desired age. When it comes to what holds them back from achieving goals, inflation tops the list, with insufficient income as a runner-up.
For 37%, coping with debt and high-interest rates are the main obstacles preventing them to reach their financial goals, while for 35% it is maintaining their lifestyle. Whereas not knowing how to manage money properly blocks one-quarter of employees from achieving their goals.
For companies putting emphasis on future readiness, investing in keeping employees financially fit should be a priority. This means offering them resources and tools that can help them understand different aspects of managing their income, and coping with inflation, debt, and high-interest rates.
Offer emergency savings account (ESA)
Emergency savings are within the top 3 financial wellness benefits employees would like to receive from their employer. Among the four generations, Gen Z prioritizes them the most.
Companies can offer a number of ways to support employees in building emergency funds in addition to retirement plans. Some examples are savings programs, and dedicated accounts. With Americans pulling money from savings at excessively high rates, emergency savings can be an additional blanket of security their employers can wrap them into.
Offer earned wage access (EWA)
Over half of the employees (53%) say they’d stay longer in a company because of on-demand pay. Zeroing in on generational differences data, it turns out that Millennials, the largest cohort in today’s U.S. workforce, prioritize this benefit more than other generations and have it in high demand: 72% of Millennial employees are more likely to stay longer at their current job if on-demand pay is offered. Offering earned wage access, or EWA, gives employees better control over their earnings, in addition to helping them make ends meet.
Guide employees into financial longevity
With close to one-third of employees not being on track to meet their financial goals, they need substantial help in reaching lifelong financial security. Several survey findings mirror this sentiment, and point to a gap employers should fill.
Though the most frequently offered financial training at work is on retirement planning, with 64% of employees receiving it, plenty of workers are still left without guidance. Offering learning resources and guidance on different retirement plans and investments can unburden employees from worrying about their financial future, and give them better control over their pensions.
Resources for the digital age: Tech tools and new currencies
For 48% of employees, it is important to get advice from their employer on new currencies, such as cryptocurrencies and NFT. However, only 16% of employees receive such training and resources from their employer. This is an opportunity for companies to differentiate and level up their benefits program.
Finally, provide tech tools that’ll help employees navigate their finances better: 7 in 10 find it important to get access to apps and tools that can help them manage their finances.
