Small but Mighty: An Analysis of the Small Employer Sample in the Financial Wellbeing Employer Survey

Summary

In previous work, the Employee Benefit Research Institute (EBRI) has investigated the role of financial wellbeing benefits within the context of large employers (those with 500 or more workers). EBRI’s Financial Wellbeing Employer Survey (FWES) has shown that large employers use these benefits to help their workers improve their day-to-day finances as well as to drive business outcomes, such as higher retention, lower absenteeism, higher productivity, and reduced medical or mental health claims. However, little is known about the extent to which smaller firms — those with fewer than 100 workers — engage with financial wellbeing benefits. To gain insights into smaller employers, EBRI fielded a version of the FWES to benefits decision makers at small employers.

In some cases, small employers appear to be similar to their larger counterparts. Both large and small employers believe that they have a role to play in improving workers’ wellbeing across multiple dimensions, and they both self-rate themselves highly in accomplishing those goals. While small employers are not a homogenous group, they do systematically differ from larger employers in several important ways.

Both large and small employers agreed that they have a responsibility in helping their employees — Across three different dimensions of wellbeing — mental health and emotional, health and physical, and financial — the vast majority of benefits decision makers believed that there is a role for the company to play in ensuring that their workers are well.

Both large and small employers have aimed to address day-to-day financial issues — Previous editions of the FWES, focusing on large employers, found that employers were primarily focused on addressing retirement preparedness with their financial wellbeing initiatives until relatively recently. After a period of above-trend inflation, large employers appear to have broadened the focus of their financial wellness initiatives to include helping workers deal with the high cost of living, financial-related stress, and day-to-day living expenses. This survey’s focus on small employers reveals that they, too, have been concentrating on addressing day-to-day financial issues with their financial wellbeing benefits.

Costs of financial wellness initiatives may be a barrier for wider adoption of financial wellbeing
initiatives — Nearly three in 10 small employers cited costs to the employer as a challenge in offering financial wellness initiatives, and nearly one-quarter cited costs to the employee as a challenge. Additionally, small employers were more likely than large employers to report that their financial wellbeing initiatives were fully paid by workers, which may have an adverse effect on enrollment.

Smaller employers tended to lag behind large employers in their propensity to offer core, voluntary, and financial wellbeing benefits — Small employers were less likely than large employers to offer health insurance; a defined contribution retirement plan; dental or vision benefits; or supplemental benefits such as accident insurance, critical illness insurance, and supplemental life insurance.

Both large and small employers viewed their benefits as successful in both improving the wellbeing of workers and in driving business outcomes — A majority of both large and small employers viewed their efforts in improving worker physical, financial, emotional, and social wellbeing as very good or excellent. Also, a majority of small employers viewed their financial wellness benefits as very effective in driving certain business goals, such as improving worker productivity, attracting/retaining workers, improving employee satisfaction, and reducing absenteeism and tardiness.