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Even with inflation easing, Americans are still feeling financial pressure. With many still feeling uncertain about the future of the economy and their wallets, nearly every employer is95%) feel a responsibility to step in and support their employees’ financial well-being.
But according to a new study, Payroll IntegrationThe 2024 State of Employee Financial Well-Being report reveals a significant disconnect between the role employers believe they play in their employees’ financial well-being and how supported employees feel. While nearly half (49%) believe their employers “fully support the financial well-being of their employees,” only 28% of employees feel the same. Millennials (43%) feel the most supported by their employers, while Baby Boomers (16%) feel the least supported.
Most employers say they will invest more (56%) or the same amount (39%) in financial wellness programs for employees, but the focus is not prioritizing what employees consider important: Only 8% of employees are interested in financial education and benefits planning.
Among the benefits employees consider most important to their financial well-being are:
- Retirement Plans
- Health insurance
- Additional compensation
- Pension system
- Life Insurance Support
- Lifestyle Coverage
- Health Savings Account
“Employees are feeling financial pressures from inflation, rising costs of living and rising insurance premiums, and now more than ever, employers feel a responsibility to step in to support their employees’ financial well-being. But there’s a clear disconnect between what employers think employees want when it comes to financial well-being delivery and benefits programs, and what employees feel they need to make a difference,” said Doug Sabella, CEO of Payroll Integrations.
He suggests employers engage in two-way communication with employees to “educate them on what’s possible and the purpose of each benefit. Once financial education is complete, employers should survey employees to find out what benefits are most in demand. The demographics of the organization will greatly influence this, and there is no one-size-fits-all option.”
Employers need to learn how to integrate new benefits options into their HR stack. Previously, it took a long time for organizations to make changes to offer different options, but now payroll providers have a marketplace that allows companies to quickly and easily integrate new benefits options and providers to fit the needs of the organization.
Most employers expect to invest more (56%) or the same amount (39%) in financial wellness programs for employees, but those investments aren’t prioritizing what employees consider important: Health insurance (54%) and retirement plans (43%) top the list of things employees should improve, but only 12% of employees are interested in improving financial education and planning benefits.
“Employers need to reevaluate how they provide financial wellness support to their employees. It’s clear that employers want to support the financial wellness of their employees, but they’re not aligned with their employees on what’s most important to make that happen,” Sabella continued. “It’s up to employers to have those important conversations with their employees and determine where to invest and how to best support their employees’ financial wellness journeys.”
“Across all generations, retirement plans such as SIMPLE IRAs or 401Ks and health insurance are the top two categories employees consider most important for their financial well-being. Employers who don’t offer these benefits can support their employees’ financial well-being by offering them. Additional compensation such as stock, profit sharing and bonuses also ranked highly across all age groups, making this another option for employers looking to promote financial well-being.”
Additional benefits, such as health savings accounts, can be low-administration costs for employers and support financial well-being. These benefits can be added to the base benefits that employees request on an opt-in basis, so that employees who want the additional benefits can take advantage of them.
According to the latest 2024 Employee Financial Wellbeing Report, nearly half of employees (49%) employers believe they fully support the financial wellbeing of their employees, 28% 70% of employees feel the same way, and the initial report details the reasons behind this disconnect, including the differing priorities of employers’ and employees’ financial wellbeing.
