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.
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.
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.
Total rewards and wellbeing leaders have shared with us what they’re doing to prioritize financial wellbeing.
01
Employers recognize the opportunity to help employees manage core needs and pay down debt as a foundational step to growing assets and establishing financial security. WTW research shows 27% of US employees have borrowed money to pay for short term expenses, and 18% have paid to cash a check. Some companies explore early access to earned wages, or leveraging corporate banking relationships to provide employees fair access to banking services and loans. Other related offerings include rent/mortgage counseling and employer-assisted housing programs which offer a one-time subsidy to employees purchasing a home.
02
Some companies are implementing financial wellbeing education series that cater to different life stages. One innovative approach is a financial wellbeing educational curriculum called "Ways to Earn," which provides short videos explaining various programs and benefits appealing to employees in a variety of financial positions.
03
Others offer employee discount programs, which incur no cost to the company and have proven to be popular with employees. These could be offered through a vendor specializing in group discounts or discounts provided by the company on the company’s own products or services. Research shows that employees trust their employer to get a better deal than they can get on their own.
04
For some organizations, HR business partners on the ground are the first line leading the way in discussions with employees about benefits and wellbeing offerings. Ensuring they are equipped to answer financial wellbeing questions can help reduce the stigma and shame often associated with financial struggles. Payroll vendors could also play a role by integrating budgeting and allocation tools into their systems. Additionally, wellness reimbursement programs or lifestyle accounts can hook attention and provide further education while employees are engaged.
05
Managers and other internal influencers can foster a culture of openness around financial wellbeing by sharing their own struggles and how employer-provided resources and benefits have helped them and vulnerabilities. (Tapping into Employee Resource Groups (ERGs) or employee networks can also provide valuable insights into what's important to employees.
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.
