Is Financial Wellness Fervor Fading?

Employer interest in financial well-being benefits appears to have plateaued, though the engagement with such programs seems to be deepening.

That interest level has leveled off at just about half (52%) of employers, and that includes those who said they were at least “interested” in implementing financial wellbeing benefits. While this is “essentially unchanged from 2018 and 2019,” according to the Employee Benefit Research Institute (EBRI), their recent report notes that, increasingly, employers that do not currently offer financial wellness initiatives say they are actively implementing such a program, rather than just expressing interest in those programs. Specifically, the percentage actively implementing increased from 12% in 2018 to 25% in 2020, while the “just interested” percentage slipped from 34% to 22%. 

However, note that the 2020 EBRI Financial Wellbeing Survey was conducted only among full-time benefits decision makers at firms[1] with at least 500 employees that were at least interested in offering financial wellness programs.

Larger employers (10,000 or more employees) were more likely to be currently offering a program than smaller employers—approximately three-in-four of those firms, compared with just under half (49%) for employers with 2,500–9,999 employees, and 47% for employers with 500–2,499 employees.

‘Whole’ Listing?

The report cites a “significant change” that they claim indicates a maturation in approach with these programs was the increased likelihood that the programs were considered “holistic”—57% of the responding employers in 2020 compared with 42% a year ago. This labelling occurred regardless of whether the program was currently being offered, it was being actively implemented, or the employer was just interested in offering it.

Not surprisingly, the largest employers were most likely to have a holistic initiative, as were those currently offering benefits.

The report cites as another sign of maturation the finding that just over half (54%) of the employers with an interest in financial wellness initiatives said they have a strategy to improve their employees’ financial wellness, while another 36% said they were currently developing one. Once again, the firms most likely to currently have a strategy were the largest firms, as well as those currently offering financial wellness benefits, those with a holistic program, and those with the highest level of concern about employees’ financial wellbeing.

Of those who have developed or are developing a strategy, 88% stated they had some outside help with development of the strategy, either benefit consultants (56%), financial wellness providers (47%), or retirement services providers (43%), with some apparent overlap. 

Pandemic Portents

The COVID-19 pandemic has had an impact on these programs—two-thirds of employers with these programs took steps to understand their employees’ financial wellness needs since the onset of the pandemic, according to the report. Not surprisingly, emergency funds/employee hardship assistance emerged as key benefits during the pandemic, but other programs that had previously seen some momentum now have been placed on the back burner, notably student loan debt assistance. Additionally, overall financial planning and coaching on all aspects of finances are overtaking the prevalence of more single-issue offerings focused on student loan debt, according to the report.

Top Issues

Companies’ top issues to address with their financial wellness initiatives were health care costs and retirement preparedness—each cited by 40% of the responding organizations. While health care was tied as a top issue to be addressed by the financial wellbeing programs, the top areas of focus were topped by two financial-related initiatives—retirement planning and basic finance or budgeting. Health/medical was only the third-highest-rated area of focus. 

The report, “2020 EBRI Financial Wellbeing Employer Survey: COVID-19 Driving Benefit Offerings and Potentially Forcing Tough Budget Decisions” can be downloaded at ebri.org.

Footnote

[1] The results were collected through a 15-minute online survey of 250 full-time benefits decisionmakers conducted in June and July 2020.