Employers increasingly feel responsible for their employees’ financial wellness–good news for a growing number of employees seeking help during difficult economic times.
More than six in 10 (62%) employers say they feel “extremely” responsible for their employees’ financial wellness, compared to just 13% who did so in 2013, according to new Bank of America research out Thursday. That sense of increased responsibility from employers is even greater with respect to their employees’ retirement, with 80% feeling very or extremely responsible for helping employees prepare for retirement healthcare needs and costs, up from 22% in 2012; and 78% for preparing employees for retirement income needs, up from 33%.
“The silver lining about the financial crisis [in 2008 was that] employees did truly start to cry out for help and 10 years later, employers listened and started to take action,” Steve Ulian, managing director at Bank of America, said during a press briefing about the findings this week. “Employees really are looking for employers to help them in this realm. And there’s more importance with this because of coronavirus.”
The COVID-19 pandemic–which is causing serious financial problems for many employees, with rampant job loss, salary cuts and retirement savings declines–will likely exacerbate that feeling of responsibility, as well as employee interest in financial wellness programs.
“I think it will just continue the trend of employees crying out for help with their financial wellness and make it a more important benefit,” Ulian said.
Kevin Crain, head of workplace financial solutions at BofA, said he expects more employers to broaden financial wellness programs to help as a result of the pandemic, adding that a bigger focus on emergency savings, student debt and caregiving programs may come into play.
In general, there has been a big increase in the number of employers offering financial wellness programs over the last several years. But despite an increased focus on programs, the Bank of America data–gleaned from surveying 996 employees and 808 employers–also found financial wellness has declined since 2018.
In March of this year, 49% of employees rated their financial wellness as good or excellent, down from 55% in 2019 and 61% in 2018. Fewer Gen Z (41%), millennial (41%) and Gen X (38%) employees rate their financial wellness as good or excellent today, compared with 60% of baby boomers and the Silent Generation. And 41% of women rate their financial wellness as good or excellent, compared to 58% of men–likely because women are more likely to halt their careers for caregiving and are still subjected to the gender pay gap.
Those numbers will likely decline more because of the financial difficulties of COVID-19.
Overall, the decline may, in part, be because employees are taking a closer look at their finances and realizing they need to save more and do more to get their finances in check–information they didn’t have prior to financial wellness programs and a sharpened eye on their situation, said Lorna Sabbia, head of retirement and personal wealth solutions for Bank of America.
The data underscores the need for financial wellness programs tailored to employees’ individual financial journeys and life paths. To increase financial wellbeing, employees say they want advice from a financial adviser, information on retirement plans, financial products/services, online financial tools or calculators, and more.
“One size really does not fit all,” Ulian said. “[Employers] need to think about employees’ needs and the tools. Employees are looking for a plan, they’re looking for a roadmap, and they want tools to keep them on track.”