Employers are getting on board with offering financial wellness plans to employees as a way of lessening financial stress and helping workers feel more secure about their financial future, a new survey finds.
The percentage of employers offering financial wellness programs rose to 83%, from 20% two years ago, according to an employee benefits survey (PDF) by Prudential Financial. An additional 14% of companies say they plan to offer these programs in the next one or two years.
The survey includes responses from nearly 800 decision makers for group insurance benefits at U.S. businesses with at least 100 full-time employees.
“Employers and employees report higher satisfaction with their benefit plans when financial wellness programs are offered,” said Vishal Jain, financial wellness officer for Prudential, in a statement. “Employees increasingly look to their employers to help them achieve financial security, and employers are seeking data and insights on how to respond and influence better outcomes.”
Financial stress is a major concern for today’s employees
According to a PwC survey, 53% of workers reported being stressed about their finances. Additionally, approximately one-third said they were distracted by personal financial issues while at work, with almost half of them spending three hours or more each week handling these matters during the work day.
Prudential’s survey examined varying employer attitudes about financial wellness and found:
- Employers who offer financial wellness are more satisfied with their total benefits program (61%) than those who do not (44%).
- Larger employers were more satisfied with their financial wellness offerings (72%) than medium (54%) or small employers (50%).
- Most large employers (61%) believe data sharing is employees’ biggest barrier to participation in financial wellness programs, citing “privacy concerns” and “putting together all the data and information.”
- Overall, retirement plan and benefit providers are the preferred providers of financial wellness.
- Criteria for selecting financial wellness providers are primarily driven by cost, ease of implementation and expertise.
“Employees are sometimes fearful to tackle their finances, yet they are a significant point of stress that needs to be addressed,” said Manisha Thakor, VP, financial education, at Brighton Jones. “What they don’t realize is that there are simple methods they can easily use to help them feel calmer and more balanced in their relationship to money.”
About one-third of employees report being distracted by personal financial issues while at work, with almost half of them spending 3 hours handling these matters during the work day each week, said Lorna Borenstein, CEO of Grokker, a subscription fitness video company. “This means your workforce is preoccupied during the work day about whether they can pay off their student loans or afford retirement, rather than focused on their job, which is not a recipe for productivity.”
It can be “overwhelming and scary” for employees to examine their finances, Borenstein said. “Beyond reducing stress; focusing on employees’ financial literacy can help you maximize your existing employee investments. If you’re already paying for a 401(k), financial advisor services, or tuition reimbursement, you want to make sure employees are taking advantage of those benefits.”
“We take a holistic approach to employee health and aim to meet employees wherever they are in their wellness journey,” said Borenstein. “Financial wellness is a critical stressor for many employees, especially millennials who are facing unprecedented financial challenges today.”
“We decided to offer financial wellness to help our team figure out where their money is going; help them make a budget,” said Sandra Devol, human resources director of The Original Rudy’s Country Store and Bar-B-Q. “Most of our team members didn’t know how to make a budget. They were living paycheck to paycheck. They had payday loans. We paid a great wage so there was no reason they were still living that way. We wanted to educate them.”