2024 employee benefits & workplace predictions: Financial wellness
Throughout 2023, employees have been voicing their concerns about their finances and how it is starting to affect their work. Employers have the ability…
Industry leaders share their thoughts, comments, and concerns about financial wellness and how it will affect their 2024.
Holistic approach to financial benefits
2023 has been a pivotal year for emergency savings in the workplace – employers have gone from asking whether they need emergency savings benefits to asking how they will implement new solutions.
In our work with large employers and solutions providers, we see that employers are increasingly taking a holistic approach to financial benefits that meet the diverse needs of their entire workforce – especially with a focus on front-line and hourly workers who are more likely to be women, Black and Latin.
In 2024, we expect employers will continue to prioritize financial benefits, starting with emergency savings. Increasingly employers and providers will emphasize less traditional financial benefits – particularly student debt repayment and caregiving. And farsighted, leading employers will begin to think beyond employees’ near term financial security toward long term wealth building, and the ways employers can enable wealth creation outside of retirement plans.
On a practical level, employers and solutions providers will be navigating Secure 2.0’s emergency savings provisions, which go into effect in 2024.
Timothy Flacke, Co-Founder & Executive Director, Commonwealth
Employers will focus on the NOW for employee financial wellness, not just retirement
Historically, employee financial wellness has been future-focused on retirement savings. But this overlooks the immediate financial needs of employees, many of whom are more worried about saving for next week, month, etc. Given today’s tough economic conditions – which are anticipated to spill over into 2024 – employers will reprioritize to strike a better balance between immediate financial needs and retirement planning, serving as a relief valve for struggling workers.
Petrina Thompson, head of HR at employee, Brightside
Improving the employee experience
Data shows 82% of workers feel some degree of financial stress and, for many employees, this stress creeps into the workplace. Financial stress can snowball from a loss in productivity to a retention issue and in some extreme cases, potential theft. In 2024, organizations that provide financial benefits and educational resources will not only improve the employee experience but serve as a key differentiator for recruitment and retention.
Tate Hackert, President and Co-founder, ZayZoon
Earned wage access
A sense of psychological safety and financial security are both integral to an employee’s level of satisfaction – and that’s not changing in 2024. We’ve seen that providing access to earned wages, through an earned wage access (EWA) program, would motivate 79% of people to feel more trusting of their employer.
Tal Clark, CEO, Instant Financial
Employers will take a more active role
As baby boomers and Gen Xers get closer to the ends of their careers, we’ll see a bigger emphasis from employees and employers on financial wellness and retirement preparedness. With interest rates rising, inflation complicating the cost of living, and an uncertain economic outlook, many employees in older generations are feeling shaky about retirement. In 2024, financial wellness will be front and center as employers take a more active role in ensuring their employees are financially prepared to retire. Education programs and incentives to save will be key for getting employees in the twilight of their careers back on track.
Michelle Bonam, VP of Organizational Effectiveness, Ceridian
SMBs & retirement plans
As we look ahead to 2024, I anticipate that more small businesses will offer retirement programs to their employees. Historically, robust retirement programs have been reserved for large companies and enterprises. PEOs have bridged this gap for many SMBs, allowing them to offer best-in-class retirement programs to their teams. While small businesses offering retirement plans has trended upward in the past several years, under Secure 2.0, there are now tax credits available for small businesses to offer retirement programs, so I expect to see this trend continue in 2024.
David Feinberg, SVP Risk & Insurance, Justworks
Minimum wage will become less relevant
The minimum wage will become less relevant if you want to build a happy and engaged workforce. Living wage – the hourly rate that a worker must earn to afford basic needs – will get more attention as financial pressures like resumed student loan payments as well as higher gas prices and childcare costs add up. Moreover, a return-to-work policy could add more expenses and put employees at a financial breaking point. In 2024, HR teams will need to pay close attention to the discrepancy between a living and minimum wage and how it impacts workplace productivity and engagement.
Brittany Schmaling, Principal Data Analyst, Ceridian