Employer financial wellbeing programs continue to expand, but as costs grow, employers increasingly are looking for ways to measure their impact, according to a new study by EBRI.
The fifth annual Employee Benefit Research Institute (EBRI) Financial Wellbeing Employer Survey found that financial wellbeing programs are being added or improved to increase worker satisfaction and retention. Yet, costs continue to be reported as the top challenge in offering financial wellbeing programs. Consequently, employers are looking for ways to measure their impact through the lens of employee satisfaction, retention and productivity.
According to EBRI’s findings, the top factor in measuring financial wellness initiatives’ success is improved overall worker satisfaction. The next two most cited factors included worker satisfaction with financial wellness initiatives and improved employee retention. Increased employee productivity was ranked comparable with the lower two employee satisfaction/retention factors, the study notes.
Cost/Benefit Analysis
As to measuring the impact, 85% of surveyed companies reported that they have explicitly developed a cost/benefit analysis based on employee satisfaction, employee attraction/retention, employee productivity, or medical/mental health claims to evaluate their financial wellness offerings.
Cost-benefit analysis by employee satisfaction was the leading approach, with employee attraction/retention next, EBRI notes. Productivity was tied with employee attraction and retention as a leading cost benefit approach, showing that employers are also looking at the benefits of these programs relative to their costs outside of just employee satisfaction metrics, the study explains.
Top Focus Areas
Companies’ top issues to address with their financial wellness initiatives were retirement preparedness, health care costs and financial-related stress. A new issue that came in just below these top three was the high cost of living, EBRI notes.
Investments and retirement planning were the top-cited primary focus areas, with basic financing and education and consulting programs being the next-most-mentioned areas of focus. The top challenges to offering these programs were costs to both the employer and the employee, the study says.
Meanwhile, some of the benefits that were most commonly offered currently also ranked highest among those that companies plan to offer, including tuition reimbursement, and/or assistance and basic money management tools.
Other benefits that were most likely said to be planned to be offered included the impact of inflation on retirement planning education, seminars or webinars; child/elder caregiving benefits; and personalized credit and debt counseling, coaching or planning.
Additionally, 84% of the companies said that their financial wellbeing benefits are being used to improve mental health and emotional wellbeing. Sixty-one percent of the companies said they offer mental health benefits or coverage.
How the benefit was provided was most likely to occur as a part of major medical/health insurance, but it was also provided as a separate service, EBRI further notes. Of those who provided a separate service, the overwhelming majority used an employee assistance program.
Addressing Diversity
When asked about whether their companies were taking specific actions to address diversity, equity, and inclusion in their financial wellbeing initiatives, EBRI found that benefit decision makers were most likely to tailor solutions according to gender, race/ethnicity, age and to ensure that financial counselors and coaches were diverse. These approaches were more common than tailoring messages specifically for the diverse groups, the study notes.
“It is not surprising that in the current tight labor market employers are focusing on expanding and improving financial wellbeing programs. However, employers do want to see that these programs are paying off in terms of increased worker satisfaction and retention considering the cost of these programs,” observes Craig Copeland, Director of Wealth Benefits Research at EBRI. “This is why measuring the success of these programs is of increasing importance to employers as well.”
EBRI’s survey was collected through an online survey of 250 fulltime benefits decisionmakers conducted in June and July 2022. All respondents worked at companies with at least 500 employees that were interested in offering financial wellness programs, and they were required to have at least a moderate influence on their company’s employee benefits program.
