Workers' financial health declined despite increasing employer concern
More employers are offering some form of financial wellness program even as workers see financial health failing.
Almost two-thirds of employers say they feel “extreme responsibility” for their employees’ financial wellness, and 83% recognize productivity gains as a result of that wellness, according to a study by Bank of America. Still, financial wellness among workers has been in decline over the past couple of years.
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Bank of America’s “10th annual Workplace Benefits Report” found that 62% of employers say they feel extremely responsible for the financial well-being of their employees, up from 13% in 2012 when the study first began probing employers’ feelings on the subject. More employers of all sizes are offering these types of plans, and the range of topics addressed by workplace wellness programs has increased.
And yet, the share of workers who rate their financial wellness as good or excellent has fallen from 61% in 2018 to 49% in 2020.
“Financial wellness can be influenced by a wide range of factors and is likely to fluctuate over time as employee goals and priorities change,” according to the report. “The goal of any financial wellness program is to promote good habits and positive financial decision-making to help employees navigate changing market environments and better manage their evolving goals — which is even more important as the coronavirus creates new challenges to maintaining financial wellness.”
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Indeed, the timing of the study is certainly a factor in the most recent results. Study data was collected in March, right as the pandemic began to spread around the United States.
“We saw early indications that the virus and the related economic results did have an impact on feelings of wellness, and we expect these effects to last for the foreseeable future,” Lorna Sabbia, head of retirement and benefit plan services at Bank of America, said in the report.
The most valuable resource to help them reach their goals, workers say, is advice from a financial professional. Over 40% of workers said this would be the most important resource their employer could offer them.
Other key findings:
- The top reason workers gave for feeling like they can’t reach their financial goals is that they don’t have enough to cover their expenses and save: 38% of respondents said this was their biggest obstacle, followed by 18% who pointed to nonfinancial goals that were more pressing.
- Women, Gen X and millennial employees were least likely to rate their financial wellness as good or excellent, and may need more support to accomplish their goals.
- Younger workers tend to prioritize short-term goals, like paying off debt or buying a house, while Gen X and boomer workers are more interested in saving for retirement.
- Although more than half of workers say they are planning for health care expenses in retirement, only 13% are doing so in a dedicated way. What’s worse, almost a quarter say it’s not even something they think about.
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