Unsteady economic conditions over the last year have made financial wellness a top concern for employees. In fact, as of January 2022, only 44 percent of employees feel financially well, and since July, 50 percent of employees report to have taken action due to financial strain, including tapping emergency savings I21%, working additional hours I21%,, looking for higher paying jobs I20%, and taking 401(k) contributions (6%).
According to a Lending Club report, 63% of Americans live to paycheck, with just one-third having enough funds to cover a one-time, unexpected $500 expense. Of those earning more than six figures $100,000, nearly 50 percent are reportedly living paycheck to paycheck. This financial strain has employees seeking financial wellness support from everyone—including their employers.
Top Financial Concerns
According to a new survey published by Talent LMS, only 5 percent of employees have met their financial goals. Inflation and insufficient income are the main obstacles preventing employees from achieving financial stability.
Combatting Inflation
Inflation is ahead of other financial obstacles for many workers. According to a recent survey from Schwab Retirement Plan Services, workers rank inflation I45% ahead of other obstacles, including keeping up with monthly expenses I35%, stock market volatility I33%, and unexpected expenses I33%.
Saving For Retirement
Because of the financial hardships of the pandemic and inflation, nearly one-quarter of workers say they plan to retire later. Additionally, one-third of plan participants need to learn how long their savings are likely to last in retirement, while two-thirds said they expect their retirement savings to last 23 years on average.
According to an employee survey from Quicken, 48 percent of those who planned to retire in 2022 are reconsidering or putting their plans on hold. Even those who weren’t planning on retiring are considering delaying their retirement even further; one-fourth of 58
In addition to retirement, employees want guidance on other financial wellness initiatives they might be struggling with such as student loan repayment, covering emergency expenses, and healthcare assistance. Additional financial wellness benefits can include legal cost assistance, disability insurance, and me. These perks can assist employees with any financial concerns
they might have
Most employees are self-taught when it comes to navigating banking and investing. Educate your employees on the ins and outs of different account fees, the types of banking and investment accounts they can have, and understand their credit
scores. Employees would also benefit from resources around building a financial life plan to help them reach their financial goals.
Fewer than 4 in 10 employers say they offer Social Security related support. Offering these tools, calculators, and educational materials can help employees get their questions answered about when to collect Social Security and its benefits. If your workforce has a significant percentage of Baby Boomers, consider offering company-focused meetings on Social Security to
address benefits, updates, and changes, in addition to access to professionals to guide them through the process.
While employees want financial wellness support from their employers, employers also feel responsible for offering guidance to employees.
According to the Bank of America Workplace Benefits Report, 80 percent of employees think that employers should support financial wellness, while 62 percent of employers feel they need to offer support to their employees
According to survey data from Plan Sponsor’s 2022 Participant Survey, 46 percent of those surveyed said their employer offers a financial literacy/wellness program, while 13 percent do not know whether their employer offers this option.
It’s a win-win situation for employers and employees, as it can lead to greater job satisfaction and retention. Sixty-eight percent of employees state that they are more likely to stay at their current job if their employer offers financial wellness benefits. In addition, more than half I61% are more likely to stay at an employer if they provide financial training and resources.
In terms of financial wellness benefits, retirement planning, investment programs, and emergency savings are the top three financial wellness benefits employees would like to receive from their employer.
Offering financial wellness support benefits employees and employers; employees get the help they need, while companies see more satisfied employees. Not only are employees more satisfied, but they are also more loyal to the company and more engaged in their work.
Additionally, companies see greater employee productivity and stronger employee performance. Don’t just take our word for it—96 percent of employees recently surveyed found their employer’s financial literacy or wellness program to be somewhat, very, or extremely helpful in improving their financial status and reducing financial stress.
For companies, financial training and support are low investment, high output benefits, and when combined with financial wellness products IFSAs, investment options, retirement contribution matching, etc.), create more stability and peace of mind for employees
Financial wellness programs can take several different forms:
Digital content and resources
Employer-hosted training and seminars
One-on-one guidance from a financial expert
Benefits offered to employees I401(k) matching, reimbursements, etc.)
Often, companies have these financial wellness programs but don’t communicate the offerings to employees, so they have no idea what benefits their company offers. You can’t leave it up to employees to remember where to access financial wellness resources. Instead, prompt them to look at the information and take advantage of benefits through communications over Slack, Teams, email, mailers, etc.
Examples of seminars or resources could be:
A seminar on banking and investing, where a financial expert shares information on different accounts, fees, credit scores, etc.
A pamphlet whit clear explanations of retirement plan options
One-on-one consultations with financial planners for personalized advice and recommendations
Tools and calculators to help determine when to begin collecting Social Security benefits
Access to digital financial wellness programs to track finances and overall financial goals
Financial wellness programs can take several different forms:
Employer-sponsored retirement accounts and contribution matching
Life insurance plans
Disability insurance
Emergency savings funds
Student loan assistance
Financial education and planning
Family-related financial assistance
Education cost
College fund assistance I529 plans)
Home buying ore rental assistance
Legal assistance
Healthcare costs
Safety net insurance
Reimbursements for commuting costs, childcare, etc.
Financial wellness programs can take several different forms:
Gather demographic data on your workforce and survey them to figure out what financial wellness benefits they would leverage the most
Create a personalized financial wellness program to meet the needs of each generation in y our workforce
Develop a strong communication strategy to share information with employees and put all of the information in one centralized location for access
Financial wellness is just one part of overall wellness, so consider expanding your programs to help support overall wellbeing
Provide the latest tools and support, such as financial literacy, coaching, and mentoring
Be flexible with your program and change it as economic conditions and employee demands change
The demand of financial wellness isn’t going anywhere in 2023. If anything, there will be more pressure on employers to provide financial wellness support for their employees. Increase employee satisfaction and morale by helping your employees out where they need it the most by offering financial education, benefits, and assistance.
The PTO Exchange platform enables employees to self-direct their unused PTO into causes that contribute to overall financial wellness. This includes exchanging unused PTO for 401(k) contributions, helping you pay off student loans, and cash withdrawals to use in an emergency. If you’re interested in learning more about the PTO Exchange Platform and who we’re helping organizations across the country better financially support their employees, schedule a demo today.
Unused vacation doesn’t have to go to waste. With PTO Exchange, you can turn unused PTO into a strategic benefit—helping employees support their families, reduce debt, save for retirement, or simply gain peace of mind.
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