Employers who have started offering emergency savings accounts are already seeing their return on investment (ROI).
According to findings from Inspira Financial’s “Emergency Savings Funds: Employers’ newest financial wellbeing tool,” 81% of employers offering emergency savings funds (ESFs) have seen a positive ROI. Another 76% say the benefit would set themselves apart from other companies.
The findings show that employers are offering the benefit to improve their employees’ financial wellbeing and differentiate themselves from competitors. According to the findings, 80% believe that employees’ financial issues could impact performances at work, and that ESFs could significantly reduce that stress and instead boost productivity. Almost all (95%) of employers say their workers would get good use out of the benefit, while 86% claim that offering the benefit has been “extremely helpful” for addressing workers’ specific concerns around future financial hardships.
“ESFs are a natural next step for employers that seek to improve employee wellbeing and increase productivity,” said Bryan Levy, Inspira’s managing director of strategy. “It’s a simple proactive benefits solution that is both easy to understand and effortless to implement. Most importantly, employers may alleviate employee financial hardships, rather than just accommodate them after a situation arises.”
Inspira’s research also shows that 91% and 93% of employers agree that ESFs would help them retain and attract employees, respectively. Additionally, 83% of employers believe ESFs can reduce risk for their companies.
Those who offer such benefits report an average employee engagement rate of 56%, with an average number distributing their funds to family and medical emergencies (71%), car repairs (57%), childcare emergencies (52%), and home repairs (52%).
The survey also revealed that employers who do not currently offer emergency savings features are considering doing so in the future. Seventy-seven percent of plan sponsors without ESFs believe emergency savings features are better than their current offerings, and 40% are deliberating whether to add the benefit soon.
Inspira’s report is the first of a two-part series that surveys 200 human resource (HR) benefit managers who offer ESF benefits.
SEE ALSO:
- EBSA Issues FAQ Guidance for Emergency Savings Accounts
- IRS Issues Guidance for Plan Sponsors Setting Up Emergency Savings Accounts Under SECURE 2.0
- 401(k) Loans Grow as Participants Struggle with Emergency Savings