Great resignation arouses employers’ interest in the financial well-being of employees
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In the ongoing war for talent, employers have added more perks to attract and retain employees.
This includes paying more attention to the financial well-being of their employees.
“I see greater interest in financial wellness programs due to the Great Resignation coupled with an increasingly complex economic environment,” said Krystal Barker, Morgan Stanley at Work’s head of financial wellness.
“A lot of companies offer a 401(k) plan and tend to offer educational programs, but they come to the table and say what else can we do?”
The surge in interest began when 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. Now inflation is rising, costing US households an additional $327 a month on average, according to Moody’s Analytics.
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Companies hope these benefits will help them in the “great restructuring.”
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Employees want companies to help. According to the 2022 TIAA Financial Wellbeing Survey, around 51% believe employers have a responsibility to help employees improve and maintain their financial wellbeing.
employers listen. In 2021, concern for the financial well-being of their employees grew, with 34% rating their concern a 9 or 10 (high), compared with 25% in previous years, according to the Employee Benefit Research Institute. Almost half were at least interested in the implementation of financial wellness services. Of those not currently offering the initiatives, 34% have actively implemented them – up from 12% in 2018.
“We’re looking at more of this towards taking a holistic view of people’s finances and really helping employees understand their overall finances,” said Craig Copeland, director of wealth benefits research at EBRI.
This may include personalized financial coaching or planning, debt management, and student loan help.
Benefits for employees and employers
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The initiatives appear to be working. The TIAA survey found that those who have participated in an employer financial wellbeing program are twice as likely to have a high financial wellbeing rating as those who are not offered the resources or who do not participate.
54% of respondents are confident they will retire when they want, compared to 32% of those who did not participate. Additionally, according to TIAA, 50% of participants are confident they won’t run out of money, compared to 29% of non-participants.
Even basic offerings like webinars have been shown to improve employee financial literacy, EBRI data shows. According to EBRI, there was an estimated increase in 401(k) contributions of between $649 and $988 per year after attending a Financial Wellbeing webinar, depending on the age of the participants and the initial contribution size.
These initiatives also benefit the employer, Barker said.
According to a 2018 Financial Health Network survey, nearly three-quarters of workers experiencing high levels of financial stress said it causes them to be distracted at work
About 60% said they would be more likely to stay in a job if their employer offered financial wellness benefits, according to the survey.
“An employer always has to find ways to grow their most valuable asset, and that is their talent,” Barker said.
But while some companies are concerned about the financial well-being of their employees, it’s unclear if it’s a trend that will become more widespread, EBRI’s Copeland said.
“It has yet to pay off for employers,” he said, noting that it’s difficult to show a direct link to improved productivity.
“As long as they can show that they attract and retain employees and that their employees benefit, it can expand,” he said.
“If people don’t use it effectively, the trend may be slowed.”
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https://www.cnbc.com/2022/04/25/great-resignation-spurs-employer-interest-in-workers-financial-well-being.html Great resignation arouses employers’ interest in the financial well-being of employees
