Employers are investing in
According to exclusive research from Arizent, the parent company of Employee Benefit News, financial wellness benefits like retirement plans — as well as newer and more in-demand benefits like
Among financial support offerings, the research found that 79% of employers are prioritizing retirement benefits, while 32% say financial wellness benefits are their top priority this year. A quarter of those employers have increased their benefits around retirement plans, and 23% have boosted their financial wellness suite, pointing to the increased need and demand for this kind of support.
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For employers, these offerings are a critical piece to moving their recruiting efforts forward while retaining their current workforce. Thirty-eight percent of employers say that offering retirement benefits is "absolutely essential" in recruitment and retention efforts. While just 8% listed financial wellness benefits as an essential need, 37% said benefits that addressed an employee's financial health were "somewhat important" in their recruiting and retention strategies, according to the research.
"As a public sector entity, we are not able to match what the private sector offers for salaries so we looked for ways to set ourselves apart," a survey respondent shared in the report. "The strength of our retirement programs and financial education helps us attract and retain employees."
'More and more critical'
Over the last several years, employees have found themselves in increasingly precarious financial situations, saddled with high debt and an uncertain economy. But that stress isn't just impacting their life at home: 66% say their financial stress negatively
As employers continue to manage the fallout of the Great Resignation, which saw record numbers of employees leave the workforce entirely or switch jobs at high frequency, benefit leaders have had to get more creative in their efforts to attract and retain talent. For many, promising employees a secure financial future is a strategy that's paying off.
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"Recruitment, retainment, flexibility in financial matters and education in financial matters all point to total employee engagement," said a respondent, when asked by Arizent what motivated their company to offer financial wellness benefits. Another employer shared that while they initially added these benefits to support their recruiting efforts, the benefits are now necessary to support their current staff.
"With the increase in inflation and the progressive increase in housing prices and cost of living, it has become more and more important and critical that employees understand their benefits and are financially stable," the respondent said in the research.
Taking the next step
Simply offering these benefits is only the first step — the Arizent data revealed that utilization in these offerings still remains relatively low. Only 15% of employers characterized their financial benefits as being "very well utilized," pointing to a gap in what's available and employee engagement.
This disparity has given employers pause around how much investment they should be making outside of the
"Employees don't understand how to use the benefits to their advantage and are not sure how well it will help them in retirement," one respondent said in the survey. They also shared they would consider offering these benefits "if more employees started asking are willing to use them and take advantage of them."
Looking beyond the bottom line
Whether employees use the benefits, they still overwhelmingly want them: 74% of workers said they would be likely to leave their job for an employer that offered better financial benefits, increasing to 79% for millennials and 84% for Gen Z, according to a report by Betterment at Work. Beyond having better savings habits and more stable finances, employees cite good mental health and loyalty to their employer as reasons they'd take advantage of these benefits.
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Employers see those positive impacts when the right benefits are in place: Arizent's data found that beyond retention and recruitment, 41% said employees are less stressed, 39% said it improved mental health and 47% believed financial support led to a more satisfied workforce.
For employers,
"The toll the pandemic took on our employees' mental health, we knew we had a responsibility to take care of our people," shared one respondent when asked what motivated them to provide financial wellness benefits.
Another respondent shared that financial education can help employees with far more than just their budget, sharing, "Our low wage earners need to learn how to be financially well and stable. It encompasses so much more — health, well-being, mental health and happiness."