Employer-provided financial wellness programs go a long way toward helping employees keep their financial lives on track, but various hurdles appear to be preventing programs from flourishing, a new survey finds.
According to TIAA’s 2022 Financial Wellness Survey, 6 in 10 Americans report being stressed about their finances, including 75% of Gen Z and 74% of Millennials. And just 22% of Americans rate their own financial wellness as high (a 9 or 10 out of 10), with Gen Z respondents having the least positive view, where only 12% rate their financial wellness as high.
The good news is that employer financial wellness programs appear to help ease money concerns of Americans—and younger workers are eager for such benefits.
Employees who have taken part in an employer-sponsored financial wellness program focused on retirement, debt management, education saving and other similar topics are twice as likely as other employees to have a high financial wellness score (32% versus 15% of those either not offered any benefits or offered but did not participate).
They are also much more confident about their progress on key markers of good retirement planning, such as being able to:
- retire when they want (54% versus 32%);
- afford the retirement lifestyle they want (54% versus 29%); and
- live comfortably in retirement without running out of money (50% versus 29%).
Those benefits hold true especially for Gen Z workers, with financial wellness programs supporting higher financial wellness scores, as well as greater retirement confidence. According to TIAA, Gen Z and Millennial respondents who have taken advantage of a program are also more likely to say they have taken key actions to improve their finances and retirement picture.
“Employer-sponsored financial wellness support is both needed and wanted by employees, especially for workers who might need help the most,” notes Snezana Zlatar, senior managing director and head of financial wellness advice and innovation at TIAA. “People who have taken part in an employer financial wellness program can see a considerable difference, indicating that it truly makes sense for employers to redouble their activities on this front.”
Responsibility and Utilization
Still, even though more than half of survey respondents—including 65% of Gen Z—agree that employers have a responsibility to help employees improve their financial wellness, many employers don’t offer programs, and among those that do, the resources are underutilized. In addition, some respondents have reservations about using that support.
According to the findings, 55% of workers report employer assistance on financial wellness as either a standalone resource or as part of a financial wellness program, but usage of offered resources hovers around 50%, except for assistance with saving for retirement, which is 65%.
In fact, the most common area that workers say their employer offers assistance is saving for retirement, but even this is only reported by 31% of respondents. Even so, 57% of respondents—including 68% of Gen Z—are interested in learning more about effective retirement planning, along with other key topics, through an employer financial wellness program.
Other higher used resources include information on guaranteed income (56%), how to improve credit score (54%), and saving for education expenses (52%). Investment help and debt/student debt help is used by about a third of those offered the assistance.
Reservations
Meanwhile, about three out of four workers have some reservations about using the support. According to the survey findings, the top barriers to engaging with employer wellness programs include:
- Worries about hidden costs or fees (27%)
- Not wanting to disclose finances or other issues to their employer (25%)
- Wouldn’t be as effective as offerings could find on own (20%)
- Don’t think offerings would make a difference (17%)
- Not confident about where to go for help (17%)
- Offerings don’t address specific needs or situation (15%)
“It’s natural for employees to have questions about cost and confidentiality,” Zlatar further observes. “It simply means that employers need to assure employees that the guidance is offered purely in their best interest as part of the employer’s comprehensive financial wellness support.”
TIAA’s survey was conducted online from Oct. 22 to Nov. 3, 2021, among more than 3,000 adult Americans on a broad range of financial management issues and topics.
