Employers offer financial well-being benefits, but are workers using them?

Employers are offering financial well-being benefits to their workers, but employers and workers are not always on the same page when it comes to offering and using those benefits.

That was the word from a panel discussion during the recent Employee Benefit Research Institute’s 2023 Financial Well-being Symposium. The discussion included some of EBRI’s recent Workplace Wellness Survey findings.

Most benefit decision-makers and workers agree that their company has a responsibility to ensure their employees are mentally, physically and financially well. The survey showed 96% of those surveyed said their company is responsible for keeping their workers mentally healthy and emotionally well. That was followed by 95% who said their company is responsible for ensuring workers’ physical health and wellness. Ninety-two percent said their company is responsible for keeping workers financially secure.

In addition, most firms surveyed rated themselves highly when it comes to their efforts to improve workers’ physical, financial and emotional well-being.

However, employees are not necessarily engaged with their financial wellness benefits, the survey showed. The main reason is a lack of understanding in how those benefits work. Other top reasons include the cost of those benefits to the employee and employee reluctance to disclose their financial issues to their employer.

Bank of America’s 2023 Workplace Benefits Report revealed a disconnect between employers and employees concerning financial wellness, said Lisa Margeson, managing director, retirement research and insights at Bank of America.

Two out of three employees surveyed reported the cost of living is outpacing their pay increases, she said. In addition, 42% of employees rated their financial wellness as good or excellent, the lowest percentage since 2010.

“What we are seeing from employees is that they are optimistic about their financial future when you are talking 2-3 years out. But they’re dealing with economic uncertainty today,” Margeson said.

How can employers help? Margeson cited three ways.

1. Financial wellness resources that help employees deal with and address long-term as well as short-term goals.
2. Programs to support employees who are struggling, such as caregivers. Margeson said employers underestimate the impact of caregiving on their workforce. Employers estimated one-third of their workforce is caregiving while 6 in 10 employees identified as caregivers. “That’s a huge gap,” she said.
3. Education and guidance on issues such as health savings accounts or Social Security claiming strategies.

Jeff Miller said that some organizations “have thrown a lot of benefits at the problem of financial well-being without knowing whether employees care about them. Miller is vice president at nudge, a financial education platform.

“In the COVID-19 environment, a lot of organizations were focused on mental and physical well-being, and they are just now getting around to financial well-being,” he said. “Some senior management can’t get their arms around the idea of financial well-being for employees. They believe that if they pay well and offer good benefits, that should be enough. But benefits are part of the well-being journey.”

Miller said he believes “there’s not enough financial education for everyone in the workforce.”

“There’s a total lack of financial literacy. People don’t have the financial knowledge, skills and confidence they need to navigate today’s environment. So much workforce education focuses on financial planning. But 60% of they workforce is living paycheck to paycheck. They don’t care about financial planning; they’re trying to survive.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.

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Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].