July 5, 2022 | Article | 5 min Business insights
The list of employee financial concerns includes stressful personal situations that distract employees’ attention from the work at hand. Thirty-nine percent of employers say that’s the item of most concern to employees, followed by increasing health care costs at 34% and the expenses and pressures of caring for family members (24%). Lackluster retirement savings come in sixth on the list, with 18% of employers choosing it as either the number one or number two issue for their employees.
Reasons employers offer financial wellness programs
To address these employee concerns, many employers — 70%, in fact — say they offer financial wellness programs. Among them, 36% intend to offer even more support for the coming year. Companies explain their business rationale for offering financial wellness programs as related primarily to employee retention and productivity. Thirty-one percent of employers said these programs help them retain valued employees, and 30% point to workforce productivity as the primary business reason for the program.
In the last two years, 77% of employers have promoted their financial wellness programs to their employees. Interestingly, most employers do not tailor these types of programs based on employee segmentation. Just 7% have designed a program specifically for their hourly employees, 4% for Millennials, and 2% for employees with young children.
Among employers responding to the Financial Well-Being Study from WorldatWork, 90% said they offer a retirement program such as a 401(k) or 403(b) plan with an employer matching contribution, and 89% offer one without a match. Health savings accounts (HSAs) are popular, with 42% offering one funded by the employee and 31% with partial employer funding. In both cases, they are being promoted as a vehicle to provide money in retirement.
Participation hovering around two-thirds of employees
Even with 9 out of 10 employers offering a 401(k)-type retirement plan, employers report an average of 64% active participation. On average, employees contribute 8% of salary to the plan. To receive the maximum matching contribution, employers commonly say employees must contribute 5% of base salary.
The WorldatWork study, published in November 2019, reveals some encouraging news as well as challenges, when it comes to employee understanding of financial benefits. For example, 43% of employers report their employees understand the necessity of diversifying their assets — a question asked in conjunction with others related to stock purchase programs.
Read more highlights of the Financial Well-Being Study at https://worldatwork.org/resources/research/financial-well-being-study.
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