The ongoing economic environment continues to heighten financial pressures for employees, who are turning their attention to their workplace benefits for support, a new study finds.
As a result, employee demand for retirement planning assistance grew compared to last year—a demand that comes as employees continue to reduce contributions to their accounts in response to economic volatility.
According to Morgan Stanley at Work’s third annual State of the Workplace, nearly 3 in 5 employees (56%) now rank retirement planning assistance from financial professionals as a high priority when choosing where to work (a 5% increase since 2022), including 25% who say it’s their top priority (a 4% increase since 2022).
HR leaders also agree with this sentiment, with 84% now viewing retirement planning assistance as a high or top priority in retaining current employees, up from 76% last year.
Employees cite goals-based retirement investment planning, access to a financial advisor, and access to retirement planning tools and calculators as the most beneficial offerings.
Employees are also paying closer attention to financial benefits, and employers are taking notice. According to the findings, nearly 7 in 10 employees (69%) say they are paying more attention to reviewing their financial benefits in 2023, up nine percentage points from last year. Similarly, more HR leaders increasingly expect their employees to pay more attention to their benefits (86%).
“Employees want and need greater support when it comes to long-term retirement planning, and while we’re seeing financial guidance being recognized as a priority for HR leaders, there is still more employers can do to support and retain talent,” says Anthony Bunnell, Head of Retirement Solutions and Deferred Compensation at Morgan Stanley at Work. “These are the times when plan advisors shine by lending seasoned expertise and a steady hand to help ensure employee finances and investments are well positioned to weather whatever economic and market conditions may come our way.”
These findings come as financial stress persists as a key concern for employers and employees alike. More than 83% of HR leaders worry that employees’ financial issues could impact their productivity, while 66% of employees agree that financial stress is negatively affecting their work and personal life.
At the same time, the study found that employees continue to scale back savings—especially among younger generations. According to the findings, 66% of employees (vs. 62% in 2022) reduced contributions to savings, citing inflation and/or recession concerns—particularly to 401(k) plans (33%), long-term savings (28%), and emergency and short-term savings (28%).
Gen Z (78%) and Millennials (80%) especially scaled back on contributions compared to their Gen X (58%) and Boomer (40%) counterparts.
Meanwhile, HR leaders recognize the influence of benefits in reducing stress and are offering some financial wellness program. Nearly 9 in 10 HR leaders (89%) now say they offer financial wellness programs (a 10-percentage point gain over 2021).
“This past year we’ve seen an economic climate that frankly a lot of workplace participants—especially younger generations—have likely never experienced before,” said Krystal Barker Buissereth, Head of the Executive Services at Morgan Stanley at Work. “As a result, financial wellness programs are becoming even more sought-after, and HR leaders can play a vital role by connecting employees with resources to help them navigate each step of their financial journeys.”
The findings are based on a survey of 1,000 U.S.-employed adults and 600 HR leaders for companies, conducted from March 16–22, 2023, and April 6–12, by Wakefield Research on behalf of Morgan at Stanley at Work.