With the Great Resignation showing no signs of slowing down, employers continue to struggle with attracting and retaining talent. I’ve previously discussed how to be an employer of choice in 2022 and what companies can do to avoid a talent shortage. One thing I’ve noted time and time again is the need for companies to offer a stronger employee value proposition, including a better salary and a more comprehensive benefits package. Along the way, I’ve highlighted the importance of specific benefits like healthcare, mental health support, family-friendly benefits, flexibility, and PTO.
But there’s one new area that’s come into the spotlight recently: financial well-being benefits. These typically include educational tools and resources, financial solutions, and contribution benefits — everything from retirement matching to budget planning tools. Like so many aspects of the workplace, however, this benefits area is rapidly evolving. Today, it’s not uncommon to see companies offering benefits like homeownership assistance, student loan contributions or refinancing assistance, and college savings contributions and plans.
In fact, while many financial benefits have been around for some time, today’s empowered workers are demanding more (and better) benefits from their employers. New research from my company, Workplace Intelligence, and SoFi at Work, a leading financial well-being benefits partner, confirms that employees are eager to take charge of their financial situation after an immensely difficult year. Fortunately, our study also revealed that most companies recognize the key role that employers can play by offering the right financial benefits and support. Let’s take a look.
The current state of workforce financial well-being
SoFi at Work’s study discovered that many employees are facing a dire financial situation, partly due to the pandemic. Over half (51%) said they were more stressed about their finances in 2021 than ever before, and just 49% said they could handle a major unexpected expense right now. Perhaps most worryingly for employers, employees reported that they’re spending over 9 hours a week at work dealing with their financial issues!
In fact, 75% of workers are stressed about their financial situation, and this stress has led many of them to take drastic measures. Last year, nearly two-thirds of employees (63%) had to take action, like taking on a second part-time job, adding to their credit card debt, or even borrowing from their retirement savings or getting a loan from family or friends.
And things aren’t looking up anytime soon. Over the next five years, nearly 7 out of 10 workers said they’ll make major adjustments to their life plans due to their financial situation, including skipping personal milestones like having a wedding or taking a vacation, or delaying buying a home. Over one-third of employees (34%) plan to push back their retirement — by 6 years on average!
Despite these alarming findings, the survey revealed that 2022 could be a turning point. The vast majority (91%) of workers have financial goals for this year, 77% said that taking control of their financial situation is a top priority for them, and 72% are optimistic about making progress. But they can’t go it alone — and that’s where employers need to come in.
Some companies aren't living up to employee expectations
Even though workers are highly motivated to improve their finances in 2022, many don’t feel equipped to do so. We found that just 53% said they know exactly what to do and how to get started to make progress toward their financial goals, and less than two-thirds (65%) said they have everything they need to improve their financial situation this year.
But exactly what role should employers play in helping their people achieve financial success? According to our research, a significant one. In fact, 84% of workers and 98% of HR leaders agreed that companies should be responsible for employees’ financial well-being. Around the same percentages believe that organizations should also be responsible for people’s financial literacy.
Unfortunately, however, many employers aren’t living up to these expectations. Just 55% of workers feel that their company cares about their financial wellness, less than half (49%) have learned a lot from their company’s financial resources, and 60% wish their company would do more to support their financial well-being. And as we discovered, that includes offering a better financial benefits package.
The future of financial well-being benefits
For our survey, we asked respondents about 20 financial benefits. Over three-quarters (77%) of employers said they provide at least one benefit, including retirement matching and financial planning tools, advising, and education. Many of the leaders we surveyed (74%) recognize that these benefits are a top priority for today’s workers.
However, when we asked employees what tools they’d like their company to offer, the responses revealed some eye-opening new preferences among today’s workforce. For example, 64% of workers said they’d like their employer to offer an emergency savings fund and 60% would appreciate homeownership assistance. Most notably, we found that 36% of workers want the option to be paid in cryptocurrency and 42% would be open to receiving NFTs as a performance reward!
Of course, there needs to be a strong business case for offering new financial benefits, as these certainly aren’t cost-free for employers. But our research revealed that at least 8 out of 10 employees say that having access to these benefits impacts their productivity, desire to stay with their employer, job satisfaction and engagement, ability to focus, and their mental and physical health. In fact, 68% of workers would give up other key benefits (including healthcare, flexible/remote work options, and even PTO) in order to keep their financial benefits.
Key takeaways for employers
In addition to the findings around workers’ financial state and benefits preferences, we also uncovered some specific areas of improvement for employers. Here are some of the most important lessons that companies should take note of:
- Improve your financial benefits package: This is an obvious one, but I want to emphasize that this is also about offering the right benefits for your people. We found that 75% of organizations are boosting their budgets for financial benefits — if you’re one of these companies, make sure that those dollars are being spent on what will drive the greatest impact for your workers and your business.
- Put a formal strategy in place: Our research revealed that only 35% of employers have a financial well-being strategy in place. Yet the cost of offering financial benefits certainly isn’t trivial and the impact on workers can be monumental. Creating a formal strategy can ensure that your company is being deliberate and thoughtful with your approach, which will ultimately yield better long-term results for all stakeholders.
- Boost your communication efforts: Around half of employees reported that their company rarely (or never) communicates with workers about their financial benefits or the importance of improving their financial well-being. So there’s no question that most employers could be doing a better job of communicating, especially when you consider the widespread state of information overload that today’s employees are dealing with.
- Focus on workers who would benefit the most: One of our more interesting findings was that some workers are much more satisfied with their financial benefits than others. For example, 81% of people making over $200,000 per year reported that they’re very satisfied with their benefits versus just 32% of those making less than $60,000 per year. With this in mind, employers may want to reevaluate whether they’re offering the right tools and communication to help all of their workforce achieve financial success.
It's time to reimagine financial well-being at work
There’s no question that the past two years have been enormously difficult for employees. But while much has been said and done around mental health, flexibility, and other benefits, it’s clear that some employers have missed the opportunity to help employees with their fundamental need to be financially secure and stable.
Right now, 75% of workers are stressed about their financial situation and they’re spending huge amounts of time (9+ hours a week!) dealing with these issues while at work. But 91% are focused on improving their finances in 2022, so I think there’s never been a better time for employers to prioritize financial well-being benefits. It’s not just the right thing to do — it’s also a critical way to boost people’s health, productivity, and desire to stay with your company in the long run.
Thanks for reading — be sure to join the conversation on LinkedIn and let me know how your company is rethinking its approach to financial well-being!