There is a serious disconnect between the role employers believe they’re playing in employees’ financial well-being and how supported employees feel, according to a new report released today by Payroll Integrations.
“There’s a clear disconnect between what employers think employees want in terms of financial wellness offerings and benefit programs–and what employees feel they need to make a difference.”
Payroll Integrations CEO Doug Sabella
Nearly half (49%) of employers believe they’re completely supporting employees’ financial wellness, while only 28% of employees feel the same. While most employers (95%) believe they have a responsibility to support employees’ financial well-being, only 36% of employees say they feel completely financially stable.
“Employees are feeling the financial pressure from inflation, higher costs of living and the rise of insurance costs and now, more than ever, employers feel a responsibility to step in to help support their financial well-being,” said Doug Sabella, CEO of Payroll Integrations. “But, there’s a clear disconnect between what employers think employees want in terms of financial wellness offerings and benefit programs–and what employees feel they need to make a difference.”
San Diego-based Payroll Integrations, a technology company reimagining how employers support employees’ financial well-being through benefit automation, released the first part of its two-part 2024 State of Employee Financial Wellness Report today. The report explores financial wellness from the point of view of both employers and employees, shining a light on the differences between their feelings towards benefits, including which benefits they each identify as most important and where they’d like more support. The new report also reveals a generational divide in financial stability and the importance of specific benefits.
Specifically, the report finds that while many employers (41%) say they plan to spend even more on financial education and planning offerings next year than they are now, only 18% of employees are interested in the programs they’re currently investing in. Employees prefer that employers invest more in health insurance (54%) and retirement plans (43%).
When it comes to the generational divide, the report finds older generations prioritize healthcare and retirement, while Gen Z employees want employers to prioritize lifestyle benefits.
Following retirement (73%) and healthcare (72%), the four generations vary in what benefits they say are most important to their financial well-being. Forty-four percent (44%) of Boomers (ages 59+) say pensions are most important, 46% of Gen X and Y workers (ages 43-58) say additional compensation, 31% of Millennials (ages 27-42) say Health Savings Accounts (HSA/FSA) and 38% of Gen Z employees say lifestyle compensation (ages 18-26).
“Employers need to reassess how they’re providing financial wellness support to their employees. It’s clear they want to support employees’ financial well-being, but they’re not aligned on what matters most to help them do so,” Sabella said. “It’s up to employers to determine where to best put their resources to better support employees on their financial wellness journey.”
More key findings
• The benefits that employers offer can make or break a prospective employee’s decision to take a job. A majority of employees say they would not accept a new job offer if retirement plans (67%) and health insurance (65%) were not offered as benefits. Employers are aligned with this, and consider retirement plans (80%) and health insurance (70%) as the most critical benefits to attract and retain employees.
• Millennials have the highest sense of financial well-being. Millennials (ages 27-42) deem themselves financially well, more than other generations. Sixty-five (65%) of Millennials say they are completely in control of their finances compared to 54% of Gen X and Y employees (ages 43-58), 38% of Boomers (ages 59+) and 33% of Gen Z workers (ages 18-26). Millennials (41%) also feel the most financially stable, compared to Boomers (38%), Gen X and Y (36%) and Gen Z (27%). Gen Z employees have only been in the workforce for a few years, which is likely why they have the lowest confidence in their financial status.
Payroll Integrations’ 2024 State of Employee Financial Wellness Report, in participation with third-party research firm Dynata, is based on responses from 250 full-time employees and HR leaders between the ages of 18 and 65. Access the report here.
SEE ALSO:
• Financial Wellness Month: Younger Americans More Likely to Feel ‘Economically Empowered’
• Employees Continue to Struggle With COVID-19 Pandemic Impacts
• Companies Cite Rising Costs of Living for Providing Financial Wellness Benefits
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
