EBRI asks what companies are doing to ensure employee financial wellness

By John Forcucci

In EBRI’s 2024 Financial Wellbeing Employer Survey, 94% of companies say they have a responsibility to help their employees become financially secure. Employees in EBRI’s Greenwald Research Workplace Wellness survey agreed.

Barbara Marder, president and CEO of EBRI, moderated a panel discussion to address employee financial wellness during the Retirement Symposium: The Forces Transforming Retirement, hosted Tuesday by Milken and the Employee Benefit Research Institute. How employees are making decisions about workplace benefits and how that is impacting their financial wellness and workplace productivity were among the wide range of topics covered in the discussion.

Panelists included Laura Schumann, vice president, Product Development and Management, at National Rural Electric Cooperative Association (NRECA), Alexander Alonso, chief data and analytics officer, Society for Human Resource Management (SHRM), and Justin Roberts, senior manager of Global Financial Health, Amazon.

Panelists (left to right): Laura Schumann, Alexander Alonso, Justin Roberts and moderator Barbara Marder.

Thinking about finances causes stress

Marder said that EBRI found that about 75% of workers say that just thinking about their financial future makes them feel stressed. Fifty percent said that saving enough for retirement causes them the most stress and that emergency savings, paying monthly bills and current level of debt aren't far behind. Also, 45% of workers say worrying about their finances actually distracts them from work.

In our survey, she said, organizations looked at improved employee satisfaction, improved productivity –although that's hard to measure as measures of success.” Marder asked the panel what they are seeing. “Are you actually seeing improved employee decision making? How do you all measure the success of the programs you offer?”

Alonso said, “When you look at our data, one of the things that stands out is people are still struggling financially. I hate to boil it down to that point, but what we find is 63% of working Americans admit that they cannot survive without employment and without a paycheck for more than six weeks. And the next thing that gives them greater pause and or fear down the line in terms of their financial wellness is “How will I survive once I am retired, once I am thinking post-employment, or more importantly, how am I building greater financial wellness, financial education and stability? And we see that coming up over and over again in our data. It existed before COVID and it continues to persist and still grow even after COVID.

“These are the things that people are balancing when they think about all these various issues as they relate to these kinds of benefits that are available,” he said. “And many people choose to ignore the situation.”

Alonso said that people who don't ignore it and take that first step of inquiring into benefits immediately de-stress and admit that they're finding themselves much more productive in the workplace. “So much so that they admit that they're 43% more productive just because they have had the opportunity to inquire about their financial status. … More importantly, taking advantage of services and recognizing that their employer has actually put things in place to help them think about these issues. When they have an employer that does that, they are three times more likely to stay with that employer.”

“Whenever we're thinking about outcomes, we think about outcomes from a programmatic perspective,” said Roberts. “Everybody knows the statistics: 70% of Americans can afford a $500 financial shock. So start there. You have an emergency savings account to solve for the lack of savings in American households. … So you start there and say, okay, I want my programs to have very specific outcomes.”

“You have something that people want, but they're not utilizing it. And so removing the barriers to utilization for an individual program is looking at whether or not engagement is what you would expect it to be at the discoverability.” After removing a barrier, Roberts said, the next step is asking if that outcome reduced the stress of the employee.

“There are a whole string of questions that we ask individuals at the point of service where we can extrapolate, okay, was this a friction-free environment for this employee? Did they get what they thought they were going to get out of this individual program?”

Not all employers are taking responsibility

While 94% of employers say that they have a responsibility for employees' financial wellness, said Alonso, adding “but what's most intriguing about that is only 57% of them actually do anything about it…The intent is there, but we have a scenario of cognitive dissonance where the action doesn't meet the intent."

He added that in their poll of working Americans, “one of the things we've discovered is 66% of workers believe that they are nowhere near being close to financial wellness or even being literate about what their financial wellness should be. Or what their financial opportunities could be if they leveraged everything that was available to them at work. So there's this disconnect. Two-thirds of the workforce wants this, but only 57% of employers are offering it. Somehow this mess persists.”

Laura Schumann said “at NRECA, we do feel very strongly about providing financial education for our members. We have a lot of employees who are in fairly dangerous jobs … We want to make sure that when they're working … that they're not worried about their finances, they're not worried about their healthcare, they're not worried about their families.

“Twenty-plus years ago, we created a program called Personal Investment and Retirement Consulting (PIRC). … It's a team of certified financial planners mostly who provide financial education and they travel to the cooperatives to conduct seminars.”

Those seminars include short programs on the basics of investing or budgeting, to a full day-and-a-half program on retirement planning, where employees can obtain projections on defined benefit programs. “We also do individual planning so they can call in and talk with our advisors. And we do individual planning. We have some financial planning software that we use as well.” This program, she said, “receives very, very high satisfaction surveys.”

“Every day we should be thinking about whether or not we're making the lives of our employees better,” said Amazon’s Justin Roberts. “What does a financially healthy employee look like?”

Only half of employees take advantage of programs

While employers can make all kinds of financial wellness programs available, employees need to take advantage of them, said Marder. “And our survey showed that about half of workers offered a financial wellbeing program participate, which you might look at that as ‘actually, that's not bad.’ Or you might look at it, well, what about the other 50%?”

Marder asked the panel, “What barriers do we still need to overcome to ensure more employees take advantage of the programs offered?”

Laura Schumann said that at NRECA “we see very, very high demand for our PIRC services. Last year we went out and did 325 seminars across the country … I think we had 25,000 calls … So we see high demand and high utilization. We see lower utilization, however, on our online tools."

Schumann said several things constitute barriers for employees. "One is urgency on the part of younger employees. We'd really love to get younger employees more activated early on. And also I'd say scalability. How can we continue to expand our services and reach more and more people with the team that we have? … How can we supplement our services perhaps with technology to meet that demand? We do find that our participants want to talk to a live person.”

Sharing personal info a big barrier

Marder said when employees are surveyed as to why they don't engage with these programs, the biggest barrier that they mention is, “I don't want to share my personal and financial information with my employer." She then asked the panel what they can do to help employees feel more confident.

“In looking at our data,” said Alonso, “it's not so much the privacy issue that we see really being a factor, as much as people don't want to share the questions that they are asking for fear that it indicates some state of non-wellbeing or non-wellness. Worse yet, in many cases, we've seen some open questions or comments where people say, ‘I don't want to look like I'm not intelligent when I'm asking these questions.’ "

Roberts said partnerships are valuable. “We have Brightside Financial Coaching, we have Fidelity financial coaches. We make sure that the ingress to them is at least at an arm's distance away and that we promote the confidentiality of those conversations in that ingress moment where they know, ‘Hey, anything you say to your coach is going to be between you and your coach and would not be shared back with your employer.’ And holding very strongly to the privacy agreements that we have with ourselves and our employees, and not crossing that line. And sometimes it means that you don't integrate as deeply with some of your partners just to hold that privacy and confidentiality line.”

EBRI: The 4 top programs

EBRI’s survey showed that over the last 12 months, the highest increase in employee engagement with financial well-being and decision support programs were emergency savings programs and personalized financial coaching, said Marder. The next was college savings accounts and student loans. She asked the panelists as they look forward to the next 12 to 24 months if these four program areas will continue to be the focus for employee engagement.

Personalized financial coaching is a priority, said Alonso. "What we see is many are also intending to do a staggered or tiered approach that allows for an automated or AI-generated kind of layer of coaching. We call this kind of an 'AI plus HI' – artificial intelligence plus human intelligence –delivering the best results for the workers.”

“ I look around the industry,” said Roberts, “it's more of the emergency savings accounts, more of the financial coaching. Those are foundational things for employees and especially as the younger generation comes up.”

Roberts also said that other foundational programs are important. “If I look at what else is coming through 529 plans, state legislation is going around for 529 plans for employers. I think we'll see more and more of that. I think that's a very interesting space. Home purchase programs, housing assistance types of programs, I think, are starting to bubble up. And student loan programs, depending on the type of employer you are, can be very impactful as well.”