Financial Wellness Benefits Employees Want Most

A new study from Bank of America has found that 84% of employers now say offering financial wellness tools can help increase employee retention.

The study is timely as discussions of the Great Resignation continue and employee retention remains a top concern. The new report noted that nearly half of employers (46%) saw an increase in resignations last year.

The bank’s 12th annual report on workplace benefits, entitled “Navigating a New Era of Financial Wellness,” comes at a time when workers are again feeling stressed about their financial situation—not because of the recent pandemic, but because of inflation and fears of a recession.

“Offering comprehensive benefits and wellness programs can be critical for employers looking to reduce attrition, can empower employees to take control of their personal finances, and improve employee’s satisfaction,” said Lorna Sabbia, Head of Retirement and Personal Wealth Solutions at Bank of America. “We are committed to partnering with employers to provide financial wellness solutions through a holistic and integrated approach that’s actionable for every employee.”

Financial wellness benefits — a growing trend with employers

There seems to be a general consensus among employers that workers need more help in the area of financial wellness—and this may be based on what they’re hearing from employees. The study found that 97% of employers feel responsible for employee financial wellness (up from 95% in 2021, and from 41% in 2013) – with two-thirds (62%) saying they feel extremely responsible (up from 56% in 2021). The same survey found that 82% of employees say employers should play a role in supporting their financial wellness.

A significant number of employees also want help with investments: 40% of employees said they want access to advice from an investment professional, and 62% of employers are now offering employees access to investment advice services (up from 55% in 2021).

Recent bad news on the economy has increased stress among employees when it comes to thinking about their retirement—the study found that 56% of employees were confident

they will reach their retirement goals, down from 69% in February 2022. Nearly two-thirds, 74%, said investing in their 401(k) and other accounts will help them build a retirement nest egg, and 61% said they are contributing enough to maximize their employer match.

At the same time, most employees seem more optimistic about the short term. The study found that looking at the next 2-3 years, most employees said they felt optimistic about their financial (56%), social (60%), and mental (62%) well-being.

Demographics matter

The survey also revealed that there are differences in financial wellness when viewed by gender, ethnicity, or age. For example, women are less likely to feel confident about their understanding of financial issues – 69% of women said they do not understand Social Security benefits compared with 54% of men. Despite this, the study said the financial wellness gender gap is closing. “As of July 2022, women were less likely to feel financially well than men by five

percentage points (42% of women vs. 47% of men), down from 10 percentage points in 2021 (47% of women vs. 57% of men) and 17 percentage points in 2020 (41% of women vs. 58% of men).”

Although all groups said they were less financially well, minority employees have become more stressed than white/Caucasian employees, when it comes to finances. The study’s data showed that 49% of white/Caucasian employees said they feel financially well (compared with 56% in February), followed by 37% of Asian employees (67% in February), 33% of Hispanic/Latino employees (47% in February) and 32% of black/African American employees (50% in February).

At the same time, all age groups said they feel less well financially, but younger workers are more concerned than older workers. The study found that since February, feelings of financial wellness has declined with Gen Z/Millennials at -15%, Gen Xers at -14%, and baby boomers/Silent Generation at -10%.