Employers are doubling down on financial wellness. Is it helping?
A growing number of employers are turning to workplace programs to help workers get their finances on track.
More than twice as many companies offer workplace financial wellness programs to employees today compared to four years ago, according to new research from Bank of America. Just over half of employers (53%) now offer programs, compared to 24% that did so in 2015, according to the company’s report, which is based on a nationwide survey of 800 employers and 1,000 employees.
“This is fantastic progress and an incredibly important trend,” says Kevin Crain, head of workplace solutions for Bank of America. “The benefits of offering these programs go far beyond improving employees’ financial literacy and can actually have a profound impact on the health of a business.”
The news is more evidence of the growth of financial wellness programs in the workplace as employers witness the toll that financial stress is having on their employees’ personal and professional lives.
Data from financial firm John Hancock shows that 69% of workers are stressed about their finances, with 72% admitting to worrying about their personal finances at work, and one in three doing so more than once a week.
“This is a large problem, and we may not know it because we don’t hear a lot of chatter about it in the workplace,” Robert Stewart, HR administrator at Brigham Young University-Idaho, said in August during Human Capital Institute’s Employee Engagement Conference in Denver. “But invisible doesn’t mean it’s not real.”
Not only does financial stress take a big toll on employees’ health—it can result in everything from depression and anxiety to migraines, ulcers and heart issues—but it also takes a hard hit on employers. Employees with money issues typically suffer from presenteeism and absenteeism and are less productive, Stewart explained. In fact, American businesses lose $500 billion per year due to employees’ personal financial stress, according to a survey of more than 10,000 Americans by Salary Finance.
“For many employees, financial stress isn’t just challenging; it’s not just difficult; it’s the No. 1 stressor in their life,” Stewart said. “If I’m having a hard time paying my bills … I’m going to view how you’re taking care of me as an employee. If you’re not, I’m more likely to leave.”
But despite the increase in the number of employers that report offering some form of financial wellness program to their employees, Bank of America reports the proportion of workers who report feeling financially well is actually declining. In this year’s study, 55% of the employees responding rated their own financial wellness as good or excellent, down from 61% in 2018. Positive financial wellness ratings correlate with employees who are able to track their expenses, pay their bills, save for goals and remain on track for funding their retirement.
What does that mean? Though an increase in the number of employers who offer financial wellness programs is encouraging, the decrease in employees who feel financially well might be because “there are still big opportunities to go further” in regards to benefit offerings, Crain says.
For example, there is a “major lack of awareness around critical workplace benefits related to caregiving and healthcare, both of which can cause a significant financial stress on employees,” he says. “More needs to be done to drive engagement around benefits that support employees’ complex financial journeys, including caregiving duties, rising healthcare costs and funding longer lives.”
Regardless of improvement needed in financial wellness programs, Crain expects even more employers to jump on board the financial wellness bandwagon in the coming years, especially as companies work to hire against the backdrop of one of the tightest labor markets in half a century.
“Offering comprehensive financial wellness programs can be critical to helping employers stand out in such a crowded market,” he says. “As companies look to attract the next generation of workers, it’s no secret that millennials and Gen Z are faced with more financial hurdles than generations prior, such as student debt and the increased cost of living. Offering financial guidance to handle these situations and become financially well can be a major perk.”