June 15, 2022
Ninety-four percent of employers include financial wellness in their overall well-being strategy in 2022, up from 90% in 20211.
Programs currently in place to support this aspect of employees’ lives include:
- Programs to enable emergency savings (e.g., savings accounts alongside the 401(k)) (40%);
- Tools and resources to support emergency savings, debt management and budgeting (79%);
- Financial seminars or lunch-and-learns (86%);
- Financial health programs or challenges (75%);
- Resources to support key financial decisions like mortgages, wills and income protection (68%);
- One-on-one financial planning with advisor/coach (72%);
- Hardship loans (51%);
- Tuition reimbursement (79%);
- Student loan counseling (40%);
- Student loan repayment assistance (20%);
- Hardship loans (51%);
- Targeted program to assist lower-income employees (e.g., program to raise credit scores, low-cost loans) (9%);
- Programs to enable early access to earned wages (pre-payday funds) (9%); and
- Subsides to support employees’ emergency savings (8%).
When it comes to employers’ global well-being strategies, 55% include financial wellness in 2022. The most common types of financial well-being initiatives offered in most countries are: 1
- General financial well-being education (45% of employers);
- Financial planning sessions (17%); and
- Locally relevant solutions tailored to specific country needs (e.g., housing costs, family financial responsibilities, debt) (18%).
Other ways global employers are supporting employees worldwide include offering commuter vouchers and allowances, on-site creche benefits and tuition and education reimbursement, along with meal vouchers and cafeteria subsidies.
Financial Well-being Initiatives in Action
Early Access to Wages, Walmart: Walmart is helping its associates avoid costly payday loans and overdraft fees by enabling them to access earned wages on demand through an app. Importantly, the app also includes financial well-being tools to help with budgeting and building savings.2 An evaluation of the app’s impact on employee retention found that in order to have a positive impact on both employees and the business, the on-demand pay feature must be used alongside other tools to promote financial security.3 Employees who frequently used the app each pay period had a lower likelihood of voluntary and involuntary termination in comparison to those who used it less frequently, but the lowest turnover rates were among employees who used the app’s savings and budgeting features compared to on-demand pay.3 In contrast, the use of on-demand pay without the use of other features was tied to high voluntary turnover.3
Student Loan Repayment, Fidelity Investments: At Fidelity, eligible employees at the manager level or below are eligible to receive $2,000 per year to help pay off their student loans, up to an employee maximum of $10,000 ($1,000 per year/$5,000 employee for part-time associates regularly scheduled to work 20-29 hours). In addition, employees also have access to online tools to help them manage debt. To measure the success of the student loan repayment program, Fidelity estimates the cumulative principal and interest saved, as well as the impact on employee retention.4
Emergency Savings Initiative, UPS: To help employees prepare for life’s unexpected expenses, UPS worked with its existing 401k recordkeeper to create an after-tax emergency savings fund. The emergency fund, which sits within the 401k, is available to roughly 90,000 non-union UPS employees and enables participants to automatically deduct up to 10% of their pay and invest the rainy day savings.5 The account offers conveniences for both UPS and employees; payroll was easily able to accommodate the new emergency savings fund because the after-tax deduction source was already set up, and employees are easily able to withdraw funds when they need them (there’s a 2-3 day turnaround via ACH).5 One drawback of the benefit is that employees must pay a tax on investment earnings and incur a penalty for withdrawals if younger than 59 1/2 years old. In the first 6 months of the benefit rollout, more than 1,400 employees added to or increased their savings.5
Employer efforts to assist employees build emergency savings has made national news. Many companies have rolled out different benefit designs to help employees save for a rainy day.6 Such emergency funds are intended to help employees better withstand financial shocks – like a pandemic – and reduce stress, with "research showing that employees with more than $400 in savings had fewer financial concerns and worried the least among employees."7
How Are Employers Measuring the Impact of Their Initiatives
Metrics to measure the impact of financial well-being initiatives include:8,9,10
- Employee satisfaction feedback related to financial well-being initiatives;
- Productivity measures including absence and tardiness;
- Employee recruitment and retention;
- Participation in and contributions to retirement, emergency and/or health savings accounts;
- Participation and engagement in financial programs;
- Percentage of employees reporting financial stress;
- Indicators of financial well-being such as the percentage of employees applying for and obtaining 401K and hardship loans; and
- Student loan balances, 401K loan balances.
- 1 | Business Group on Health. 13th Annual Employer-Sponsored Health and Well-being Survey: Chart Pack. March 25 2022. https://www.businessgrouphealth.org/resources/health-well-being-survey-chart-pack. Accessed April 6, 2022.
- 2 | Surane J and Boyle M. Walmart's early pay perk Is popular, but sometimes has a cost. March 9, 2021. https://www.bloomberg.com/news/articles/2021-03-09/walmart-s-experiment-with-paying-early-sees-some-higher-turnover. Accessed August 19, 2021.
- 3 | Even. Earned wage access impact study on Walmart + Even. March 9, 2021. https://www.even.com/blog/walmart-business-impact-of-on-demand-pay. Accessed August 19, 2021.
- 4 | Fidelity Investments. Fidelity's student debt employer contribution program continues to be selected by leading businesses to attract and retain top talent. May 2018. https://www.fidelity.com/about-fidelity/employer-services/fidelitys-student-debt-employer-contribution-program. Accessed July 19, 2019.
- 5 | Business Group on Health. Well-being & Workforce Strategy Institute Virtual Meeting. April 22, 2021.
- 6 | Tergesen A. The New Employer Benefit: Matching Emergency Savings. The Wall Street Journal. August 27, 2021. https://www.wsj.com/articles/the-new-employer-benefit-matching-emergency-savings-11630065600. Accessed August 30, 2021.
- 7 | Gopnik M and Collins D. Emergency Savings: A life jacket in rough seas. Commonwealth. https://buildcommonwealth.org/assets/downloads/A_Life_Jacket_In_Rough_Seas.pdf. Accessed August 4, 2021.
- 8 | Prudential Financial, Inc. Benefits and beyond: How employers think about financial wellness. 2018. https://www.prudential.com/wps/wcm/connect/f4d2bb4f-9734-45b9-91d0-f308c969e262/B-and-B_Exec_Summary_Flyer_rF2_DIG.pdf. Accessed July 5, 2019.
- 9 | Sammer J. 6 ways to measure the success of financial wellness efforts. Society for Human Resource Management. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/measure-financial-wellness-success.aspx. Accessed June 27, 2019.
- 10 | Employee Benefits Research Institute. EBRI 2021 financial wellbeing symposium. September 22, 2021. https://www.ebri.org/docs/default-source/fwrc/sept-2021-symposium/fwsym2021_pub.pdf. Accessed September 23, 2021.