Strategies to Support Financial Well-being

This guide presents the business case for offering financial well-being programs and benefits not only in the United States but also around the world.

June 15, 2022

This guide presents the business case for offering financial well-being programs and benefits not only in the United States but also around the world.

Data show that 94% of employers currently include financial wellness in their overall well-being strategy, with 55% of employers including it in their global well-being strategy.1 And for good reason: a 2020 survey revealed that two thirds of employees feel stressed when thinking about their financial future, and 70% say they “need their employer’s support to ensure that they are healthy and financially secure."2

Employer support for employee financial security has never been more important. The COVID-19 pandemic created large-scale financial stress, leading many employees to reduce spending, find other ways to earn money, tap into emergency savings, take a withdrawal from their retirement account, use a payday loan or payday advance, or postpone retirement.3,4 Moreover, the negative effects of the pandemic have been felt unevenly, as financial hardship has disproportionately affected people of color, women and individuals who are low-income.5 Yet, even as many have struggled during the pandemic, positive financial behaviors have emerged too, with some employees reporting that they increased savings or paid off or lowered debt.3, 4 Thus, the time is now for employers to create a financial well-being strategy that helps all employees achieve and maintain their financial goals.

This resource presents the business case for developing a global financial well-being strategy. It provides an overview of the major barriers that employees face in achieving financial security and offers ways employers can support the financial well-being of their diverse workforce.

Financial Security: Imperative to the Health and Performance of Your Workforce

Financial well-being initiatives are an integral part of a company’s global workforce strategy because financial security – or lack thereof – has an impact on outcomes that business leaders across an organization care about deeply, such as employee health, overall well-being, performance and productivity.

When people are worried about their personal finances, the costs are borne both by those who experience such worry and by the organizations that employ them.

Carrie Leana, University of Pittsburgh6


Employees who worry about short- and long-term finances are two times more likely to be in poor health than those without financial worries.7 Financial stress is also shown to result in higher stress and depression, worse self-reported general health and higher diastolic blood pressure.8 Furthermore, financial stress impacts sleep; one study showed that 26% of employees in the United Kingdom (U.K.) have lost sleep over their financial situation.9


Financial security, defined as “the perception that you have enough money to do what you want to do, and don’t regularly worry about money,” contributes to employees’ overall well-being.10 Gallup research shows that “a lack of worry about money has more than double the impact of income on overall well-being,” and the feeling that you have enough money to do what you’d like “has three times the impact of your income alone on overall well-being.”10

Performance and Productivity

Employees who are struggling with their finances lose 57% more work time due to absence than employees without financial worries.7 They’re also less engaged and productive than their peers.7 One study found that employees on average spend approximately 156 hours a year thinking about their finances at work, translating to about 3 weeks of distracted work time a year.11 This distraction can be costly: A study of more than 1,000 short-haul truck drivers found that drivers who were worried about their finances were more likely to have a preventable accident in the following 8 months. Based on the average cost of a commercial truck accident, study authors estimated that drivers’ financial worries were associated with $1.3 million per year in additional costs to the company.12 In the U.K., decreased productivity and increased absence based on financial stress has been estimated to cost companies in the region £120.7 billion every year.9

The Financial Worries that Keep Employees Up at Night … and Distracted at Work


In the U.S., average levels of non-mortgage debt per adult have risen to $21,069, an increase of $1,663 from 2016.13 Among employees, 80% say they have some type of debt outside of their mortgage.14 This debt influences the day-to-day life of employees, with 38% of Black Americans, 45% of Hispanic Americans and 26% of white Americans saying that debt and debt payments prevent them from addressing other financial priorities.15

Globally, debt is also a concern. Denmark, Netherlands, Norway and Sweden have the highest levels of household debt as a percentage of income in the world, and 48% of U.K. employees have borrowed money just to meet their basic needs.16

Student Debt

Student debt is rising in most developed countries around the world and is a major barrier to financial security.17 The average debt for a college graduate in Britain has increased $35,000 in 5 years, from $20,000 to $55,000; in the U.S., average student loan debt is $29,927.18 And as with other financial issues, there are racial and ethnic disparities when it comes to student loan borrowing and repayment; 90% of Black students and 72% of Hispanic students finish college with debt, compared to 66% of white students. Black, Hispanic and Indigenous students are also more likely to default on their loans.19 This debt affects future financial security, as 70% say student loan debt is impacting their ability to save.3

Lack of Savings

In the U.S., nearly 40% of people cannot come up with $400 to cover an unexpected expense without relying on borrowing.20 Furthermore, people under age 55 in the U.S. withdraw about 40 cents of every dollar that goes into their 401k account before retirement; employees of color, low-wage and lower-educated employees are the most likely to make these withdrawals.23

When it comes to savings, there are stark racial and ethnic disparities. Black families (41%) and Hispanic families (35%) in the U.S. are less likely to have retirement savings than white families (68%).24 Furthermore, the availability of liquid assets, essential for emergency situations, also reveal disparities. Black and Hispanic families have about $2,000 or less on hand, while white families have $8,100.25 These disparities in savings are attributed to less access to affordable financial tools and low-interest loans.

Inadequate Income to Meet Basic Needs

Despite participating in the labor force, 6.3 million adults in the U.S. had incomes that fell below the poverty level in 2019.26 Part-time workers, women, Black and Hispanic Americans are more likely to be among the working poor.26  But even for those who live above the poverty line, it can be difficult to afford basic needs, with 42% of full-time employees reporting that they find it difficult to meet household expenses on time each month.4

The financial issues that lower-income employees face is exacerbated by rising health care costs. Health care spending by families with large employer health plans has increased two times faster than workers’ wages over the last decade. These two factors have made it more difficult for lower-wage employees to feel financially secure.27

Globally, 77% of employees do not feel they can meet the needs of their family. Thirty percent of employees in Eurozone countries, 23% in Australia and 29% of Canadian employees cannot come up with $2,000 (local currency) in an emergency.28, 7 And 8% of global workers report living in extreme poverty despite having a job.29

Health Care Costs

Although many employer plans cover a significant portion of health care costs, average out-of-pocket spending among U.S. employees with employer-sponsored coverage has grown 58% over the past 10 years.30 As mentioned above, these costs have risen twice as fast as wages. In 2018, the average family with employer coverage in the U.S. spent $4,706 on premiums and $3,020 on cost sharing, for a combined cost of $7,726.30 For some, these costs can present affordability challenges. About half of surveyed employees said they or a family member skipped or postponed getting health care or filling a prescription in the past 12 months because of cost, and about one-third could not pay an unexpected $500 medical bill.31 And this held true during the COVID-19 pandemic, as 57% of people whose financial stress increased during this period said they avoided addressing their medical issues due to cost.4

A 2021 survey found that 46% of employees who rate their financial well-being as poor say access to health services is sometimes or often an issue.3

But health care costs don’t just impact employees’ ability and willingness to seek care; they also impact their financial well-being. More than 40% of employees in the U.S. have reported that that they reduced or stopped saving for the future to pay health-related costs.14 Other surveys show that people make trade-offs, like putting off vacations or major household purchases, cutting spending on household items or using up savings to pay medical bills.31 Globally, governments are looking to shift health care, retirement and social costs to the private sector. As a result, multinational employers are introducing cost sharing into their medical insurance, shifting costs to employees.

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