Big quit spurs employers’ interest in workers’ financial well-being
Gece33 | E+ | Getty Images
In pursuit of the war for talent, employers have added more perks to attract and retain employees.
This means paying more attention to the financial well-being of their workers.
“I see increased interest in financial wellness programs due to the great resignation, coupled with an increasingly complex economic environment,” said Krystal Barker, financial wellness manager at Morgan Stanley at Work.
“A lot of companies offer a 401(k) plan and tend to offer educational programs, but they come to the table and say what more can we do?”
The surge in interest began as companies evaluated their diversity, equity and inclusion initiatives following the death of George Floyd. Then the Covid-19 pandemic added financial stress to the lives of many Americans. Today, inflation is rising, costing US households an additional $327 per month, on average, according to Moody’s Analytics.
More from Invest in yourself
Many cash-strapped Americans are feeling the sting as the cost of living soars
Companies hope these perks will help them in the ‘Big Shakeup’
Deepak Chopra: Here’s how to be careful with your money
Workers want companies to help them. Some 51% believe employers have a responsibility to help employees improve and maintain their financial well-being, according to TIAA’s 2022 Financial Wellbeing Survey.
Employers are listening. In 2021, concerns about the financial well-being of their employees increased, with 34% rating their concern as a 9 or 10 (high), up from 25% in previous years, according to the Employee Benefits Research Institute. Just under half were at least interested in implementing financial wellness benefits. Among those not currently offering the initiatives, 34% were actively implementing them, up from 12% in 2018.
“We see this going more towards looking holistically at people’s finances and really helping employees understand their total finances,” said Craig Copeland, director of wealth benefits research at EBRI.
This can include personalized financial coaching or planning, debt management, and help with student loans.
Benefits for workers and employers
Bloom Productions | Digital Vision | Getty Images
The initiatives seem to be working. According to the TIAA survey, those who have participated in an employer financial wellness program are twice as likely to have a high financial wellness rating as those who are not offered the resources or who do not participate. not.
Among those who participate, 54% are confident that they will retire when they want to, compared to 32% of those who do not participate. Additionally, 50% of participants are confident they won’t run out of money, compared to 29% of non-participants, according to TIAA.
Even basic offerings like webinars have been shown to improve employees’ financial literacy, according to data from EBRI. There was an estimated increase in 401(k) contribution levels between $649 and $988 in the year following participation in a financial wellness webinar, depending on participants’ age and level of initial contribution, according to EBRI.
These initiatives also benefit the employer, Barker said.
Nearly three-quarters of workers with high financial stress said it distracted them at work, according to a 2018 Financial Health Network Survey
According to the survey, about 60% said they would be more likely to keep their job if their employer offered financial wellness benefits.
“An employer must always find ways to add value to their most valuable asset and that is their talent,” Barker said.
However, while some companies are taking care of the financial well-being of their employees, it’s unclear if this is a trend that will continue to grow, EBRI’s Copeland said.
“There still have to be benefits for employers,” he said, noting that it’s hard to show a direct link to improved productivity.
“As long as they can show they are attracting and retaining workers and their workers are getting something out of it, it can grow,” he said.
“If people don’t use it effectively, the trend can be slowed down.”
Disclosure: NBCUniversal and Comcast Ventures are investors in Tassels.