2024 EBRI Financial Wellbeing Employer Survey: Employers See Financial Wellness Benefits as a Tool to Improve Worker Satisfaction and Productivity

Summary

The seventh annual Employee Benefit Research Institute (EBRI) Financial Wellbeing Employer Survey found that employers are increasingly concerned with helping workers improve their day-to-day finances. While firms are still concerned with helping workers prepare for retirement, firms are expanding the areas they wish to address with their financial wellbeing offerings. Now, in addition to retirement planning, top issues include helping workers deal with high health care costs, high costs of living, financial-related stress, daily living expenses, and budget and money management. Additionally, recent public policy developments — such as the passage of SECURE 2.0 — have led to an increased focus on emergency savings, which is reflected in the priorities of employers: 77 percent reported either offering or planning to offer an emergency savings account within the next year or two, a modest increase over levels observed in 2023.

However, familiar obstacles remain. Employers cited costs to employees — as well as to the company itself — as a challenge in offering financial wellbeing programs. Continuing a trend observed in 2023, employers accordingly cited measuring the impact of their financial wellness offerings on employee productivity and worker satisfaction. Still, most benefits decision makers reported being optimistic that their company’s budget for these benefits will increase in the short term, an indication that these benefits are a critical component of their benefit offerings.

• Top Issues, Areas of Focus, and Challenges — Companies’ top issues to address with their financial wellness initiatives were high health care costs, high costs of living, daily living expenses, financial-related stress, budget and money management, and retirement preparedness. For top focus areas, investments and retirement planning were the top-cited primary focus, with basic financing and improving physical health following closely. The top challenges to offering these programs were costs to both the employer and the employee. Outside of costs, complexity in implementing programs and concerns about employee access to initiatives and programs were also cited as top challenges faced by employers.
• Measuring Success — The top factors in measuring financial wellness initiatives’ success were increased employee productivity and improved overall worker satisfaction. Satisfaction with financial wellness initiatives themselves was also an important measure of success. Improving usage of existing employee benefits and improving employee retention were slightly less important than in 2023.
• Cost-Benefit Analysis — Seventy percent of the companies surveyed reported having explicitly developed a cost-benefit analysis to determine the return on investment of their financial wellbeing offerings. When asked about the factors these cost-benefit analyses were based on, benefits decision makers most commonly reported basing their calculations on improved employee financial wellbeing, improved productivity and performance, and improved employee recruitment/retention. Improved absenteeism/tardiness and reduced medical or mental health claims were less commonly cited in formulating cost-benefit analyses evaluating firms’ financial wellness offerings.
• Impact on Mental Health — Employers continue to consider mental health to be an important area of focus. Eighty-three percent of the companies surveyed said that their financial wellbeing initiatives had either a large impact or a small impact on their employees’ mental, emotional, and social wellbeing. Additionally, 55 percent of the companies surveyed said they offered mental health benefits or coverage. The benefit was most likely to be provided as a part of major medical/health insurance, but it was also provided as a separate service or through both means. Of those who provided a separate service, the overwhelming majority used an employee assistance program (EAP). In addition, over half offered financial therapists, and over one-third offered mindfulness or meditation apps.
• Emergency Savings — Seventy-seven percent of the benefits decision makers surveyed responded that their firms currently offered or planned to offer emergency savings accounts in the next year or two. A higher share of benefits decision makers indicated that their firms offered emergency savings accounts with incentives (40 percent) than without incentives (33 percent). The most common emergency savings benefit was loans from an employer-sponsored 401(k) plan, offered by 56 percent of firms. While $1,000 penalty-free withdrawals from retirement accounts — allowed through recently passed legislation — was the emergency savings benefit offered the least (21 percent), it was the benefit with the highest share of planned implementation within the next year or two (43 percent).
• Specific Actions Addressing Diversity — When asked about whether their companies were taking specific actions to address diversity, equity, and inclusion in their financial wellbeing initiatives through actions targeted for different genders, races/ethnicities, and ages, companies were more likely to respond that they ensured that financial counselors and coaches were diverse in terms of gender or race. Firms also responded that they offered different solutions to accommodate different age groups and that they tailored messages differently based on age. Nearly one-third of firms also offered different solutions to accommodate different racial and ethnic groups. However, tailoring messaging by gender and race and ethnicity were two of the three least likely to be cited as being undertaken.
• Specific Steps Taken to Understand Diverse Needs — To understand specifically what companies are doing to understand the different needs of diverse workers, numerous possible steps were explored. Conducting financial needs assessments was the most common step taken to understand diverse workers’ needs. Holding focus groups or conducting one-on-one interviews or discussions online/by phone and creating a financial wellbeing score or metric were the least likely steps to be undertaken.

While companies were still strongly focused on these programs’ impact on worker satisfaction, employers were also seeking to show the impact of financial wellbeing programs on the bottom line in terms of increased productivity — likely tied to the fact that an overwhelming majority of benefits decision makers expected their budgets for financial wellness programs to increase in the short term. In addition to surveying employees and analyzing existing benefits data and other quantitative employee data, companies are still developing cost-benefit analyses to provide some measure of the success of these benefits.

The continued evolution of financial wellness programs is a crucial question going into 2025, particularly with companies still in the process of implementing emergency savings benefits made possible by recent legislation. As these programs grow in value to employees and are used for attraction and retention, the expectation that they will be provided will only increase. At the same time, the specter of a recession could turn the tide as employers seek to cut costs, especially given the additional resources that are being used for these programs. Nonetheless, these programs also have the potential to address companies’ diversity, equity, and inclusion goals, as they increasingly focus on providing help in all aspects of individuals’ finances, allowing them to match the specific issues faced by those in different groups.