EBRI Issue Brief

EBRI’s 2018 Employer Financial Wellbeing Survey

Nov 29, 2018 22  pages


Employers have offered wellness programs for decades in order to promote healthier habits among workers. Their foray into financial wellness is newer. The Bureau of Consumer Financial Protection (BCFP) began exploring financial wellbeing as a goal of financial education in 2014 with a report documenting nearly 60 hours of open-ended interviews by its research team with adult consumers and financial practitioners. Their research suggested that financial wellbeing can be defined as a state of being wherein one:

  • Has control over day-to-day, month-to-month finances;
  • Has the capacity to absorb a financial shock;
  • Is on track to meet financial goals; and
  • Has the financial freedom to make the choices that allows one to enjoy life.

In its report, the BCFP concluded, “We need to develop innovative programs and interventions and specifically test them (and our implementation strategies) in terms of their efficacy — their efficacy in supporting the development of the key factors we have identified that may lead to and underlie financial well-being, and their efficacy in improving financial well-being itself.”

The Employee Benefit Research Institute (EBRI) began its exploration of employers’ interest in offering financial wellness initiatives in the spring of 2018. It began with a series of focus groups that asked:

  • How are employers defining financial wellbeing for their workers?
  • What are employers doing and not doing in this area?
  • Why is addressing financial wellbeing on employers’ agendas?
  • How are employers defining “success” in this area?

While there was little consensus around the definition of financial wellness, many employers in the focus groups agreed in general with the BCFP’s definition: Financial wellbeing is a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life.

Specifically, employers identified with the notion that it is important for employees to balance current and future financial needs and that future financial security should not come at the expense of financial stability today. For example, employers wanted to know that, when they were automatically enrolling workers into a 401(k) plan, these workers could afford to save for retirement and were not putting themselves into a financially fragile position by doing so.

The focus groups also revealed that financial wellness programs were about more than just increasing workers’ productivity. While some employers were concerned about absenteeism due to financial stress, for example, many were also generally interested in promoting workplace satisfaction.

The clear message from these focus groups was that, while financial wellbeing was of great interest to employers, the programs were typically in their initial stages. Many had engaged only in pilot financial wellness programs for select groups of their worker population. Oft-times, these programs involved one-on-one counseling and were difficult to scale for broader rollout. In terms of measuring the success of these initiatives, the most common measure was utilization (e.g., were all available slots in a workshop taken) or defined contribution (DC) plan benchmarks (participation rates, average balances increase, and investment mix). Success was also measured by surveys that evaluated the program itself — content, understandability to the participants, and engagement of the presentation/material — not whether the individual made a change in their behavior.

EBRI’s 2018 Financial Wellbeing Employer Survey built on these results with online interviews of 250 larger employers. As with the focus groups, these were employers with an expressed interest in financial wellness initiatives for employees.  Those with no interest were screened out of the sample. While employers with as few as 500 workers were included in the sample, the vast majority (79 percent) had 1,000 or more employees in their workforce. A wide range of industries is represented in the survey, with the heaviest concentrations in health care and social assistance (15 percent), manufacturing (13 percent), educational services (11 percent), finance and insurance (10 percent), and government (12 percent).

The findings paint an interesting picture of employers who — like those in the focus groups — define both financial wellbeing and the programs that could facilitate wellbeing quite broadly. They face many challenges in implementing these programs, grapple with how to measure the success of the programs, and ultimately grapple with how to make a successful business case for broader implementation of these initiatives.

Specifically, the survey found that:

  • The largest firms are most likely to offer financial wellness programs: Of companies that were at least interested in providing employees with financial wellness initiatives, 54 percent were offering them to their employees at the time, 12 percent were actively implementing, and 34 percent were interested in financial wellness initiatives. Three-quarters of firms with 10,000 or more employees offered financial wellness initiatives at the time, compared with 49 percent of smaller firms. Those with the highest level of concern about employees’ financial wellbeing were also most likely to offer a program (73 percent).
  • Financial wellness initiatives tend to be in their infancy: 38 percent of firms considered their initiatives to be in the pilot phase. Another 34 percent described their efforts as periodic campaigns or ad hoc programs.
  • There are mixed approaches and costs associated with the initiatives: There is little consensus on the approach to financial wellness initiatives. A mix of methods was the most common provider of initiatives. Firms were most likely to be paying for these programs themselves, but costs per employee varied significantly.
  • Firms offer a mixture of financial wellness offerings: On average, firms offered 4.7 financial wellbeing or debt assistance benefits to their employees. The most common initiatives were employee discount programs, tuition reimbursement, and financial planning education.
  • Delivery of offerings is often high-touch: When it comes to delivering these benefits, in-person group sessions, email communications, and in-person individual sessions were the most common methods. In-person individual sessions were the most likely method for both personalized financial counseling and credit and debt counseling programs, while in-person group sessions were utilized most often for financial education and incentivization programs.
  • Human resources professionals are the main motivators: Human resources professionals are the main motivators for these programs. Thirty-nine percent of firms relied on communications from HR to encourage their employees to use the financial wellness initiatives. Additionally, 4 in 5 said that HR will be the champions for implementing financial wellness initiatives.
  • Employers face a number of challenges in offering financial wellness initiatives: Cost to employer (50 percent), interest among employees (46 percent), and value proposition to employees (40 percent) ranked as the top three considerations that employers stated they use to determine whether to offer financial wellness benefits to their employees.

Success measures range widely: Measures used to evaluate the success of financial wellness initiatives range from specific (improved employee retention) to quite broad (improved overall worker satisfaction). However, with few using metrics or assessments, it may be difficult for employers to accurately evaluate their initiatives.