Employers, take note: Financial wellness benefits employees really want

view original post

Credit: WrightStudiov/stock.adobe.com

Even as inflation eases, Americans continue to feel the financial pressure. As many people still navigate uncertainties about what’s next for the economy–and their wallet–nearly every employer (95%) feels a responsibility to step in and support their employees’ financial well-being.

But, according to new research from Payroll Integrations, 2024 State of Employee Financial Wellness Report, reveals there’s a major disconnect between the role employers believe they’re playing in employees’ financial well-being and how supported employees feel: Nearly half (49%) believe they’re “completely supporting employees’ financial wellness, while only 28% of employees feel the same. Millennials feel the most supported by employers (43%) and boomers feel the least (16%).

While most employers say they’ll invest more (56%) or the same amount (39%) in financial wellness programs for employees, their focus doesn’t prioritize what employees find important. Only 8% of employees are interested in financial education and planning benefits.

The benefits employees consider most important to their financial well-being include:

  • Retirement plans
  • Health insurance
  • Additional compensation
  • Pension plan
  • Life insurance support
  • Lifestyle compensation
  • Health savings account

“Employees are feeling the financial pressure from inflation, higher costs of living and the rise of insurance costs and now, more than ever, employers feel a responsibility to step in to help support their financial well-being. But, there’s a clear disconnect between what employers think employees want in terms of financial wellness offering and benefit programs–and what employees feel they need to make a difference,” said Doug Sabella, CEO of Payroll Integrations.

He suggests employers engage in two-way communication with employees, “educating them on what is possible, the purpose of each benefit,” he said. “When the financial education is completed, employers should survey the employees to see what benefits are in most demand. The demographics of an organization have a huge impact on this and there is no one size fits all option.”

Employers should educate themselves on how to integrate new benefit options into their HR stack. It used to take a long time for organizations to make changes in offering different options but now with payroll providers having marketplaces, companies can easily choose to integrate with new benefit options or providers quickly to align with the needs of their organization.

While most employers expect to invest more (56%) or the same amount (39%) in financial wellness programs for employees, their investments don’t prioritize what employees find important. While health insurance (54%) and retirement plans (43%) are on the top of employees’ lists to have improved, only 12% of employees are interested in improved financial education and planning benefits.

“Employers need to reassess how they’re providing financial wellness support to their employees. It’s clear they want to support employees’ financial well-being, but they’re not aligned with them on what matters most to help them do so,” Sabella continued. “It’s up to employers to have those important conversations with employees to determine where to invest and how to best support employees on their financial wellness journey.

“Across all generations, retirement plans, including Simple IRAs and 401K’s, as well as health insurance, are the top two categories that employees consider most important to their financial wellbeing. For employers that do not offer these benefits, offering them can help support employee financial wellness. Additional compensation, such as stocks, profit sharing, and bonuses, was also ranked high across all age ranges, so this is another option for employers who want to promote financial wellbeing.”

Some additional benefits, such as health savings accounts, are not costly for the employer to administer, and can also support financial wellbeing. These benefits can be added to the core benefits that employees request on an opt-in basis so that those who want to take advantage of the additional benefits can do so.

The new 2024 State of Employee Financial Wellness Report reveals that nearly half (49%) of employers believe they’re completely supporting employees’ financial wellness, while only 28% of employees feel the same. The inaugural report dives into reasoning behind the disconnect, including differing the financial wellness priorities of employers and employees