Financial Wellness: Buyer’s Guide
How can employers create and implement a successful financial wellness program? And what does success mean?
Lack of retirement funds, high debt, and no emergency savings are the main reasons for implementing employee financial wellness programs. More and more employees are using employer-provided services to help them with their finances. The statistics below highlight the benefits that workers and organizations have from financial wellness programs
The Cost of Financial Wellness
- Personal finances are the most significant stressor for nearly half of employees (46%) (PwC, 2017)
- The cost of financial stress on an organization adds up to more than $1,900 per employee per year (JohnHancock, 2019)
- On average, people spend 13 hours per month worrying about personal finances at work, causing a loss of productivity (Mercer, 2017)
- 30% of employees are distracted by their personal finances at work (PwC, 2017)
- 5% of employees have missed a day or more in the last six months due to financial stress (JohnHancock, 2019)
- Financial stress has impacted different areas of workers’ lives, including their mental health (34%), sleep (33%), self-esteem (30%), physical health (23%), relationships at home (21%), productivity (18%), and attendance at work (15%). (PWC, 2022)
- 65% of employees are seeking a new job because of finances. (PWC, 2022)
- 41% of workers worried about their finances are six times more likely to report that it has impacted their productivity at work and seven times more likely to say that it affected their attendance. (PWC, 2022)
- More than half of financially stressed employees are distracted for three or more hours because of their finances. (PWC, 2022)
- 53% of companies report that their financial wellness initiatives cost more than $50 per employee, whereas 39% say they cost less than that. (EBRI, 2022)
Employee Demographics
- Financial wellness and income are not directly linked, which means that difficulties can occur at any economic level (Mercer, 2017)
- Both men and women chose the same top five financial wellness programs (Enrich, 2020)
- Financially stressed employees are more likely to be younger and female (PwC, 2017)
- 41.3% of respondents said they feel somewhat or entirely financially well (Enrich, 2020)
- Employees whose mental health has been affected by their finances are more likely to be Millennials and females. (PWC, 2022)
- 42% of employers offer different types of financial initiatives and solutions to accommodate different age groups, and 30% offer such that accommodate different genders. (EBRI, 2022)
Employers Benefit from Financial Wellness
- 59% of workers with access to financial wellness benefits report being somewhat or extremely satisfied with their employers’ offering (Prudential, 2019)
- 64% of employers say financial wellbeing has gained more importance over the last two years (Alight, 2019)
- Employers are focused on four stages of financial independence- security (35%), foundation (56%), growth (8%), and freedom (1%) (Alight, 2019)
- 88% of employers say they currently have or are developing a financial wellbeing strategy (Alight, 2019)
- 44% of employees believe their employer cares about their financial wellbeing (PwC, 2019)
- 71% of employees have used employer-provided services to help them with personal finances (PwC, 2019)
- Approximately 90% of employers believe financial wellness programs are very or somewhat effective. (EBRI, 2022)
- 90% say they are effective in improving employee productivity, 89% say they improve the overall financial well-being of their staff, 88% report it enhances the attraction and retention of workers, 84% say it boosts employee satisfaction, 86% report it reduces absenteeism and tardiness, and 79% say it reduces employees’ medical and mental health claims. (EBRI, 2022)
- 84% of organizations believe that offering financial wellness support helps with retention, whereas 81% say it helps attract top talent. (Bank of America, 2022)
Financial Wellness Improves Employee Performance
- Seven in ten employees feel financial wellness programs helped reduce stress and increased loyalty to their employer (JohnHancock, 2019)
- After improving employee financial wellness, the average number of unplanned absences fell by 24% ( SOA, 2017)
- 44% of workers with access to financial wellness benefits are highly optimistic about their financial future, versus 32% of those without access (Prudential, 2019)
- Users of financial wellness programs report better mental health, lower stress, and better physical health than non-users (Prudential, 2019)
- More than eight in 10 employers say that offering financial wellness programs results in more satisfied, loyal, and engaged employees, as well as greater employee productivity and performance. (Bank of America, 2022)
Most Desired Financial Help
- 60% of respondents said they are not financially well and that they could benefit from better financial wellness (Enrich, 2020)
- 46% of employees want help with debt management (PwC, 2016)
- Some financial wellness benefits that employees would like to have that are not available are identity theft protection, after-tax emergency savings accounts, and financial coaching services (Prudential, 2019)
- One in four employees agree that the most desired employer benefit is a financial wellness benefit with access to unbiased counselors (PwC, 2019)
- Considering that the top financial concern for employees is not having enough emergency savings, more financial wellness programs need to focus on building that (PwC, 2017)
- Nine out of 10 workers expect to get financial support from their employers. (Bright Plan, 2022)
- More than half of employees put financial wellness benefits at the top of their most desirable benefits. (Bright Plan, 2022)
- 43% of workers are interested in salary-linked, low-cost employee loans. (Salary Finances, 2022)
- 63% want their employer to provide them with emergency savings accounts. (Salary Finances, 2022)
- Employees are interested in a benefit that helps them to save more money (62%), helps them pay down existing or avoid future debt (36%), includes access to a financial counselor (31%), helps them understand and manage their money better (26%), includes financial education (25%), and includes budgeting tools (23%). (Salary Finances, 2022)
- Four in 10 workers want access to advice from investment professionals. (Bank of America, 2022)
- Three in 10 want access to financial advice via a digital portal. (Bank of America, 2022)
Defining Financial Wellbeing & Wellness Programs
- Employees define financial wellness as being stress–free (34%) and being debt–free (18%) (PwC, 2019)
- The definition of financial wellbeing is described as being able to meet current and ongoing financial obligations, feeling secure in your financial future, and being able to make choices that allow you to enjoy life (CFPB, 2015)
- The most popular financial wellness offerings are 401k matching (64%), health savings account (37%), and tuition reimbursement (32%) (Enrich, 2020)
- The top reported benefits from a financial wellness program are preparing for retirement, help control spending, and pay off debt (PwC, 2017)
- Only 18% of employees feel very confident in their ability to make the right financial decision (JohnHancock, 2019)
- 76% of workers are attracted to companies that care more about their financial well-being. (PWC, 2022)
- The top areas of focus in the financial wellness programs that employers offer are investments and retirement planning (31%), basic financing (25%), and education or consulting programs (19%). (EBRI, 2022)
- To understand their staff’s financial needs, 60% of employers conduct surveys, 59% examine their existing employee benefit/retirement plan data, 49% examine health-related data, and 48% analyze other quantitative employee data. (EBRI, 2022)
The benefits of financial wellness programs significantly outweigh the costs of such programs, so having such a program in place is vital to businesses and employees.
Written by shortlister editorial team
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