Chalk up yet another endorsement for financial wellness programs.
Financial wellness is “an opportunity for employers to reduce employee stress, improve retention and engagement and set themselves apart in the marketplace,” according to a new study released June 6 for Morgan Stanley at Work conducted by the Financial Health Network.
The survey of 1,000 full-time employees of mid- to large-sized companies found many employees are struggling financially and financial stress has an impact on employees’ productivity at work.
“Providing financial wellness resources and education to employees has tremendous benefits,” said Brian McDonald, Head of Morgan Stanley at Work. “Finances are one of the greatest sources of stress for employees, and those concerns affect their productivity. Firms that invest in financial wellness resources for employees will clearly set themselves apart in the marketplace.”
Key Findings
• Financial Wellness is an opportunity for employers: the financial stress experienced by employees is affecting their productivity at work. Employees are looking to employers for solutions and are open to financial advice, including when offered at work.
In fact, financial stress has spillover effects on employees’ productivity: nearly four in five employees (78%) who report high financial stress say that they are distracted by stress at work.
Finances are the greatest source of stress for employees: 58% say their finances cause them stress, more than their work situation (51%), health issues (45%) or family issues (44%). This is true for employees at all income levels, even higher wage-earners, with 52% of employees with household income of more than $100,000 per year said that finances cause them stress.
Three out of four employees (74%) say that financial wellness benefits are important for an employer to offer, while 60% of employees surveyed say they’d be more likely to stay at a job if their employer offered financial wellness benefits that help them better manage their finances.
• Employees have diverse financial needs: employees are struggling with many aspects of their financial health and need help with short-term goals like budgeting, managing debt and building emergency savings, in addition to long-term goals like retirement planning.
Half of employees spend more than they earn each month, while 37% say they have more debt than they can manage, and 41% said that they do not have enough savings to cover three months of living expenses. Even among higher-income employees, more than half report debt and unexpected expenses as sources of stress (52% and 55%, respectively), while 43% report that inadequate savings cause them stress.
• Employers can compete by offering holistic solutions: fewer than one-third of employees reported that their employers offer financial wellness benefits beyond retirement plans. Yet when these benefits are offered, uptake and employee satisfaction is high.
Among those employees whose employer offers financial wellness benefits that help with financial needs such as emergency savings, student loan repayment tools or access to financial coaching, between 40% and 60% say they have used them in the past three years.
Among those employees who use at least one financial wellness benefit, 56% say that those benefits cause them to feel positively about their employer.
• Clear communication and ease of use are important for uptake of employee financial wellness solutions: employees report that making it easier to find and understand their benefits is more important even than incentives in encouraging them to use the benefits they are offered.
Nearly half (42%) of employees say that they do not feel adequately informed about the benefits and programs their employer offers. Employees who do not use every benefit offered cited a clear explanation and easy access as the two most important factors that would make it more likely for them to use the benefit, even more than incentives.
Online calculations and live meetings with a financial advisor are preferred ways to learn about benefits, with 66% and 62% saying they prefer those methods, respectively. Other online approaches such as in-person seminars (55%), live webinars (43%), chat rooms (31%) or social media platforms (31%) are less popular.
Additional findings from the survey can be found here: https://finhealthnetwork.org/research/workplace-financial-health/