Summary

Wellbeing programs have been in the workplace for many years, as employers have sought to manage health care costs by engaging employees in proactively taking control of their wellness through lifestyle programs and other efforts.

More recently, this approach has begun to extend to financial wellbeing, with employers seeking to engage employees in not just retirement savings but student loan debt, emergency liquidity needs, budgeting, and more.  Financial wellness can incorporate financial education and financial literacy but often goes beyond these more traditional approaches to include helplines, coaching, wellbeing assessments, challenge programs, and even financial wellness communities to help workers with overall financial wellness. There may also be more specific solutions such as debt evaluation and refinancing and debt payment matching services, which are focused on specific financial stressors such as student loan debt, and early wage access and low cost credit access, which focus on emergency needs. In fact, the ways that employers are engaging employees in the area of financial wellness — and even defining financial wellness and how to measure it — vary greatly. Some employers are focusing on demographics that they believe are financially stressed in specific ways (e.g., student loan debt); others are taking a more holistic approach to employees’ financial wellbeing. Many, however, are just beginning to get their arms around best practices in this area.

In EBRI’s 2019 Employer Approaches to Financial Wellbeing Solutions Survey, EBRI asked employers to define what they mean by employee financial wellness, what issues they are trying to solve for, what types of solutions they are providing, and even why they are so focused on the area of financial wellbeing, their motivations, and what constitutes success.

Conducted in June of 2019, the survey focused on companies with at least 500 employees where respondents expressed at least some level of interest in offering financial wellness programs.

Key Findings

• A key criterion for participating in the survey was that employer respondents were screened to ensure that had some interest in offering financial wellness initiatives. Among respondents:
  • More than half reported currently offering financial wellness initiatives to employees (51 percent).
  • Another 20 percent were actively implementing and 29 percent were interested in implementing such initiatives.
  • This compares with 2018, where 12 percent were actively implementing and 34 percent were interested in implementing such initiatives.
• There was little consensus on what financial wellbeing looks like.
  • Definitions varied:
    • Just over a third (34 percent) defined financial wellbeing as having access to assistance and resources that enable good financial decisions.
    • Another 3 in 10, however, defined it as being comfortable or financially secure overall.
    • Coming in third at 21 percent was the definition of being equipped to achieve retirement security through planning and saving.
  • Top issues faced by employees that financial wellness initiatives are meant to address also varied:

• Eleven percent of employers cited effective utilization of existing benefits.
• One in ten cited budgeting and money management.
• Nine percent cited health care costs.
• However, preparing for retirement was clearly the most common at 40 percent.

• Financial wellness offerings often remain focused on traditional benefits:
  • The top four financial wellbeing initiatives cited were fairly traditional benefits such as tuition reimbursement (64 percent), financial planning education (60 percent), employee assistance programs (EAPs) (55 percent), and basic money management tools (49 percent).
  • However, EAPs became less prevalent as financial wellness initiatives in this year’s survey compared with 2018.
  • Firms offered an average of 4.2 financial wellness benefits.
  • Employers cite a link between wellness and financial wellness. Seventy-four percent of those offering health insurance or wellness programs viewed them as part of their financial wellness programs.
• A third (34 percent) of employers reported either currently offering student loan debt assistance (11 percent) or planning to offer (24 percent) such initiatives.
  • Traditional approaches such as loans offered through the employer-sponsored retirement plan were the most common approach to offering this benefit (39 percent).
  • Student loan debt payment counseling or education ranked number two in prevalence at 27 percent of those offering.
  • A surprisingly large number reported actively helping workers pay down student loan debt either via matching 401(k) contributions tied to employees’ student loan payment (25 percent) or through loan payment subsidies paid by the employer (15 percent).
  • Among those offering a student loan debt assistance program, the average number of such benefits offered was 2.3.

• Employer assistance with emergency funds or liquidity needs is on the rise.

• More employers reported offering payroll advances in 2019 than in 2018 (17 percent and 12 percent, respectively).
• However, those offering emergency funds or employee hardship assistance in 2019 were in line with 2018 at 28 percent.
• The most common type of emergency assistance offered was an employee relief or compassion fund (44 percent), followed by part-time donations or leave-sharing (36 percent) and matching contributions to employees’ personal accounts (35 percent).
• Among those that already offer an emergency fund, the average number of such benefits offered was 2.5.

• When it comes to motivations for offering financial wellness benefits, the top reasons given by employers were consistent with reasons given in 2018.
  • Overall worker satisfaction: 46 percent (vs. 54 percent in 2018).
  • Reduced financial stress: 42 percent (vs. 48 percent in 2018).
  • Improved employee retention: 35 percent (vs. 47 percent in 2018).
  • Improved employee use of existing benefits: 35 percent (vs. 34 percent in 2018).
• Employers are measuring financial wellbeing success according to:
  • Worker satisfaction.
  • Use of retirement benefits.
  • Reduced stress.

• As in 2018, the most common approach to understanding employees’ financial wellbeing needs was examining existing data:
  • Sixty-two percent of firms have examined existing employee benefit data.
  • Fifty-three percent have examined health-related data
  • One third (32 percent) have done a financial wellness needs assessment
• Only 1 in 4 (23 percent) have created a score or metric. The characteristics of employers that created a financial wellbeing score or metric were (vs. those that haven’t):
  • More likely to offer a holistic financial wellness program — 56 percent vs. 38 percent for those not planning on creating such a score or metric.
  • Much more likely to have a high level of concern about their employees’ financial wellbeing—33 percent vs. 15 percent for those not planning on creating such a score or metric.
  • Much more likely to have a high number (six or more) of financial wellbeing offers — 56 percent vs. 15 percent of those not planning on creating such a score or metric.
  • More likely (33 percent) to express a high level of concern about employees’ financial wellbeing.

• Only 6 percent of employers reported that financial wellbeing initiatives are entirely paid by the employee.
  • Instead, financial wellbeing initiatives were primarily either fully funded by the employer (46 percent) or a shared cost between employer and employee (48 percent).
  • Annual costs per employee varied by industry.