How employers 'do' employee financial wellness, and one issue the near-future may bring

You don’t typically hear the topic of childcare mentioned in the same breath as “employee financial wellness.” But thanks to COVID-19, families may end up being even further away from the goal of financial wellness — as parents face a shortage of childcare and must decide whether to quit their jobs.

That’s a personal takeaway from a recent webinar by EBRI on its 2020 Financial Wellness Survey results. The big-picture industry-wide takeaway, however, is that EBRI’s survey findings actually indicate that more employers are offering financial wellness benefits of some kind, according to EBRI senior research associate Craig Copeland.

Three quarters of firms with 10,000 or more employees are now offering financial wellness benefits, and 25% of firms are highly concerned about their employees’ financial wellbeing, the survey indicated.

A typical component of financial wellness being offered is financial planning education. Less likely to be offered, but only because they are newer services, are payroll advance loans, debt management and student debt assistance.

The important issues employers said they wanted to address with financial wellness programs were health care costs and retirement preparedness.

But when it came to actually trying to fix employee financial wellness problems,  26% of employers focused on retirement preparedness, 25% focused on financial budgeting, and only 18% focused on health and medical with their financial wellness benefits. That could be because it’s easier to assist with retirement saving than to reduce health care costs, Copeland said.

More employers are fully paying for financial wellness benefits (49%) than are sharing the cost with employees (42%).  Which prompts one to wonder: Isn’t charging an employee for a financial wellness program if they need a financial wellness program sort of defeating the purpose?

Purpose doesn’t always factor in. It seems only recently more employers are realizing they need a financial wellness strategy, rather than simply throwing programs at employees without a goal in mind — 54% of employers say they have a strategy to improve employee financial wellness, and 36% are currently developing a strategy. Most (88%) are using an outside source to help develop their financial wellness strategy:

• 56% are using a benefits consultant
• 47% are using a financial wellness benefits vendor
• 43% are using a retirement plan provider

The coronavirus pandemic has affected employer offerings and actions. At the most basic level, employers were making sure people knew what was available already, promoting existing resources:

• 58% of employers communicated to their employees about getting help inside their organization
• 45% of employers provided information on resources outside the organization
• 42% communicated information about relief available from the government

COVID-19 has had an effect on benefits offerings, as one might expect. Benefits more likely to be offered due to COVID-19 included emergency funds (over 20% said they would); financial planning, personalized financial counseling and debt management (for each of these, over 20% said they would offer it).

The EBRI survey revealed that when it came to employee engagement, employees were more likely to use emergency/short term financial assistance benefits such as payroll advance loans, debt management services and caregiving benefits.

Other non-financial benefits employers said they were offering or would be offering were mental health benefits and flexible work hours.

Which brings us back to childcare.

Currently employers have stitched together a patchwork of flexible work and remote work for parents with children at home during the day. But when more offices and workplaces open, and the safety protocols have been met, parents will be expected to come back to the workplace, despite the fact that schools may still be virtual and many daycare centers have gone out of business.

“It will force many people, especially women, to make a tough decision” and leave the workforce, said Copeland.

What will we see in the coming 4 to 5 months as offices open? Will we see financial wellness needs of employees trumped by the exodus of mostly female workers having to quit their jobs to be home for their children?

“Companies cannot let this slide,” Copeland said. “They will lose employees.”