While employers are most effective in supporting social and physical wellbeing, they're struggling to meet the financial wellbeing needs of their employees, according to WTW research. In fact, only one in five employers believe they are effective in this area, despite employees indicating financial wellbeing is their biggest challenge. This topic spurred lively conversations among global benefits and wellbeing leaders participating in recent forums we sponsored.
The expectation of employer support
There's a growing expectation by employees that employers should provide support for financial wellbeing. Half of the employees surveyed believe their employers can secure better deals on financial services than they could on their own. Fortunately, there are now more options for employers to provide employees more choice and flexibility in their retirement savings plans for plan sponsors to consider. More choice increases benefits appreciation and enables employees in various personal situations and life stages to personalize their benefits in a way that caters to their unique needs.
Defining financial wellbeing
But what does financial wellbeing really mean? While many view it as retirement readiness, it encompasses much more. Financial wellbeing refers to employees’ ability to bounce back from adverse events throughout their lifetime. It includes budgeting, saving for emergencies, affording healthcare, negotiating large purchases, accessing capital and getting better deals. Employees are increasingly interested in these practical aspects that help address financial vulnerabilities and curb stress throughout their career.
What are employers doing to meet these needs?
Total rewards and wellbeing leaders have shared with us what they’re doing to prioritize financial wellbeing.
Employees and employers are frequently faced with new challenges and headwinds (for example, high inflation, economic downturns, rising healthcare costs, financial loss resulting from emergencies). To respond, total rewards leaders must get smarter about how they connect pay, benefits, career, and wellbeing decisions to improve overall financial fitness of employees. This is no small feat as businesses are forced to make difficult decisions about where their next investment should go.
