Financial Wellness Seen Increasingly as Key Workplace Benefit
As their sense of responsibility in meeting the financial needs of their workforce grows, employers appear to be offering more robust and comprehensive services in the workplace, according to new survey results.
“We are seeing the number of employers offering comprehensive corporate benefit programs increasing dramatically. This year, 95% of employers agree that they should provide financial benefits in the workplace, and more than half (56%) say they feel extremely responsible for it, ”notes Lorna Sabbia, Head of Retirement and Personal Wealth Solutions at Bank of America.
In addition, the number of employers offering financial wellness programs has increased to 46%, up from 40% in 2020. Of course, company size and industry type influence the availability of financial wellness programs. For example, 38% of employers with retirement assets of less than $ 20 million offer
These findings come from Bank of America’s 11th Annual Workplace Benefits Report, a statewide survey that examines trends contributing to holistic employee well-being, including steps companies are taking to support emotional, physical, and financial well-being , and how corporate performance programs are evolving amid an increasingly diverse workforce.
With regard to expanded offers, the survey found that more than 4 in 10 employers now offer support with new topics such as saving for emergencies, repaying student loans and planning care costs.
And even in the face of mounting stress from the pandemic, the sense of employee financial health began to recover in 2021, after having decreased the year before. In fact, more than half (51%) of workers rate their financial wellbeing as good or excellent, up from 49% in 2020. Additionally, more than 8 in 10 employers agree that financial wellness programs lead to higher employee productivity and engagement lead, satisfied and loyal employees.
Among the key results of the Bank of America survey:
- Saving for retirement is a top priority, but more can be done. Saving for retirement is the top financial priority for men and women alike, but a lower percentage of women prioritize saving (34% versus 46% of men).
- Company retirement programs need to go beyond financial issues. Employees say that their mental (60%), physical (54%), and financial (46%) health significantly affects their overall wellbeing. However, the survey found that only a third of employers communicate about mental and physical health more than twice a year.
- Healthcare is an area where there is room for improvement. Only 35% of employers offer a high deductible health insurance plan that would give workers access to a health savings account (HSA). However, the percentage of eligible employees saving more in their HSA has increased (74% in 2021 versus 67% in 2020) while the percentage of recurring withdrawals has decreased (51% in 2021 versus 68% in 2020 ).
- Debt remains a challenge. Here, the survey found that 88% of Black, 87% of Hispanic, 81% of White, and 60% of Asian American employees currently have some type of debt. Employers are responding to this challenge with 53% now offering debt assistance through their financial wellness program, up from 15% in 2013.
- Women still lag behind men financially. Only 47% of women rate their financial well-being as good or excellent compared to 57% of men. Women are also more likely to feel stressed about their financial situation (92% versus 88% of men) and are twice as likely to be awake at night from financial stress.
- Employees want professional, individual advice. Staff named access to a financial advisor, information on retirement plans, and helping them develop good financial skills and habits as the top three areas they would like employers to help with. In fact, the proportion of employers offering access to a financial advisor rose from 40% in 2020 to 47%. In addition, the proportion of employers offering help in developing good financial skills and habits rose from 39% in 2020 to 45%.
- Younger groups of workers show more gender and ethnic diversity. Women make up 69% of Generation Z and Millennials, versus 51% of Baby Boomers and the silent generation. Younger workforce populations are also much more ethnically diverse.
In observing the more diverse workforce, Sabbia finds that diversity has been shown to bring benefits to the workplace, but it also makes it harder to provide benefits to workers. “Diverse workforces have wider needs, but the common denominator is that they ask their employers for help in achieving their goals,” she says.
Bank of America recommends these steps to take:
- Take the time to understand what employees need to provide the guidance and training they need, when they need it.
- Integrate plan-making capabilities and provide access to education and guidance to help employees track progress and promote good financial habits.
- Comprehensive support to help employees save and invest for their retirement savings.
- Investing in the advancement of digital resources to drive engagement and increase employee productivity and loyalty.
- Think about how supporting diversity workforce can benefit the company and take steps to support diversity and inclusion across the company.
Findings are based on a survey conducted by Escalent on behalf of Bank of America of a national sample of 1,363 full-time employees participating in 401 (k) plans and 834 employers, both of whom offer and are carrying 401 (k) plans sole or joint responsibility for the decisions made in the plan. The survey was conducted between December 28, 2020 and February 8, 2021.