As more workers report financial worries on personal, emergency, and retirement savings, a new report by insurance broker and consultant NFP finds plan sponsors are trying to listen to their employees’ needs—even if their workers are skeptical.
According to NFP’s 2023 U.S. Benefits Trend Report, 32% of employers believe they take employee feedback into consideration when it comes to benefit offerings. Yet only 18% of workers agreed.
In fact, only close to a quarter (24%) of workers feel their benefits completely meet their needs, and just 39% completely understand their workplace benefits. When workers were asked why their employers offer benefits, most (61%) said to retain existing employees or attract new talent (57%), with only 35% believing it is to support employees’ professional lives, reward employees (40%), or support their personal lives (44%).
The findings are concerning, considering that NFP also found a disparity between employer and employee sentiments on financial wellness. While 83% of employers classified their employees’ as financially health, just 55% of workers indicated the same—a 28% difference and the largest gap relative to employee wellbeing in NFP’s report.
NFP research found half of workers are feeling a financial squeeze. Fifty-five percent of workers say they are living paycheck to paycheck, another 55% believe they are in control of their finances, and 52% say they have a three-month savings cushion, down from 62% in 2022. This is also as 95% of workers report worries over the economic situation in the U.S., found NFP.
As higher numbers of workers feel financial stress, more are also experiencing mental and emotional stress. However, a large chunk of employers (72%) said in NFP’s research that they do not plan to offer additional mental health support, and only small figures of plan sponsors say they will add services including employee assistance programs (EAPs) (14%), telebehavioral through medical insurance (6%), telebehavioral through third-party (6%), and health stigma reduction training (1%).
“All employers should be taking note of the connection between financial worries and mental health,” said Kim Bell, EVP, head of Health and Benefts, in the report. “Everything is trending in the wrong direction, and employees are feeling the crunch.”
This is especially prevalent for Millennial workers, the report finds, who have experienced economic stressors brought on by the Great Recession in 2008, the COVID-19 pandemic, and the highest inflation rate in the past few decades, and are now struggling to prioritize day-to-day costs, emergency savings, student loan debt, and retirement preparation.
Spotlighting long-term and short-term benefits, including life insurance and long-term care, financial planning services, and student loan debt repayment, can increase employee satisfaction and holistic wellbeing while reducing stress, said NFP.
“There is a growing expectation that the employer will provide employees with the financial tools they need,” said Bell in the research. “Given the distinct connection between money worries and bottom-line performance, things like productivity, attendance and engagement, employers need to demonstrate that they genuinely care and have tools and resources in place to help employees with their financial situation.”
SEE ALSO:
- Employees Turn to Plan Sponsors Amid Inflation Impacts
- Employers Can Lessen Workforce Stress and Strains: Mercer
- Inflation Causing Participants to Struggle with Finances, Mental Health
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
