As of fall 2024, there are a few signs the country is slowly but surely emerging from a harrowing economic ordeal. Inflation has slowed somewhat, unemployment remains low, and indicators like GDP (gross domestic product) show surprising growth.
But these are macro trends.
What keeps your company’s employees awake late into the night and dominates their thoughts throughout the workday isn’t the state of the nation’s economy but their retirement savings, children’s college funds, credit card debt, and the next housing payment or grocery bill.
According to a CNBC/SurveyMonkey survey conducted in March:
- 70% of Americans say they are stressed about their finances.
- 45% say they are worse off financially than five years ago.
- A little over half (51%) are pessimistic about where the economy is heading.
Employers cannot afford to bank on an improving economy reducing employee financial stress. Regardless of the economic situation, financial worries have always been and will always be a top driver of stress, which can contribute to any number of physical and mental health issues.
Related: Three Financial Wellness Email Templates. Read it here →
Financial Wellness Comes Into Focus
Researchers have found that financial stress can drive employees to distraction, disengagement, burnout, and, ultimately, career changes.
- About 45% of employees struggling with finances say their worries distract them at work.
- Of that group, only about half (54%) believe there is a promising future for them at their employer, compared to 69% who feel more financially secure.
In recognition of financial health’s role in overall wellbeing — and to promote focus and engagement during work hours — more and more employers have experimented with financial wellness programs in recent years.
Over half of employers (54%) now offer financial wellness tools; an additional 30% plan to offer financial wellness tools. And so far, financial wellness seems to be paying off. According to the Employee Benefit Research Institute, 85% of companies said financial wellness programs “had either a large impact or a small impact on employees’ mental, emotional and social wellbeing.”
5 Innovations in Employee Financial Wellness
While it’s true that nearly everyone suffers through financial stress at least sometimes, financial stress means different things to different people.
For example, younger employees may be focused on paying off student loans, while mid-career workers might be thinking about upgrading their homes, supporting elderly parents, or funding their children’s education. Older employees have their eyes on retirement.
For this reason, effective financial wellness programs generally cast a wide net with options targeting employees with different life stages, backgrounds, and goals. Below are five ways employers are helping their employees improve their financial wellness in 2024 and into 2025.
1. Data-Driven Solutions
Because your company is (most likely) a main income source for most of your employees, you have access to a significant data trove concerning their financial situations.
How often do employees draw from their retirement accounts? How many employees are having their wages garnished? Are employees using tax-advantaged accounts such as HSAs?
With the answers to these questions, you can tailor financial wellness offerings to meet the needs of your specific employee population.
Anonymous surveys can also help you gauge employees’ financial wellbeing. Wellness program provider WellSteps offers a list of possible questions, such as, “Is your current financial status affecting your personal, social, or work life?” and “Do you have adequate funds to comfortably retire?”
2. A Financial Wellness Communications Strategy
For years, the delivery giant UPS had offered a plan to help employees save for unexpected expenses. But the company found very few employees were using the plan, even though it knew many were struggling with credit card debt and other bills.
That all changed when UPS launched a communications strategy around the benefit. As recounted in a SHRM article:
“ created a new landing page with details about the option, started webinars about financial planning and sent direct mail pieces. The company was careful to avoid sending information about the program when it knew employees would be receiving materials from the company about other matters.”
Within a year, participation in the program increased 39%.
The UPS example demonstrates that offering financial wellness tools like emergency savings plans is often insufficient. Educating employees about their options is equally important. And, as UPS did, remember that employees are constantly bombarded with messaging of all kinds. Breaking through the noise requires a sustained and multi-channel approach.
Click here to learn more about building a year-round benefits communication strategy.
3. Access to Financial Expertise
A Harvard Business Review article points out that, according to the latest research, “a well-designed financial education program can remove at least one hour per week of worry and financial distress for each employee who participates in that program.” Considering the value to your company of this regained time, an investment in unbiased financial guidance for your employees may be well worth the cost.
Financial wellness advisors can meet with employees one-on-one or in groups or hold webinars on topics such as basic financial literacy, budgeting, debt management, emergency savings, or retirement preparation.
Says the Harvard Business Review:
“When considering this type of outside provider, look for firms that offer live service during business hours as well as on-demand resources such as video libraries, internally written articles, and curated lists of web resources that address common financial well-being topics.”
4. Student Loan Debt Assistance
At the end of 2023, student loan repayments, which had been on pause for three years due to the COVID pandemic, resumed. This has put student loan debt back at the forefront of many American workers’ minds.
In a MassMutual survey, three-quarters of respondents with student loan debt say the resumption of payments “has had a negative impact on their day-to-day financial health.”
There are several ways employers can help their employees pay down their educational debts:
- Student loan contribution plans, which function like retirement plans, allowing employees to set aside a portion of each paycheck for student loan repayment. Many employers offer matching contributions.
- Tuition reimbursement programs that help employees gain new skills and expertise without taking out loans in the first place.
- Free debt counseling.
- Providing educational resources like loan payoff calculators, budgeting tools, and links to government student loan forgiveness programs.
5. Gamified Financial Wellness Challenges
Wellness challenges — like the classic workplace steps challenge — have been staples of employee wellness programs for years. More recently, employers have begun integrating financial challenges into their wellness programs.
By “gamifying” healthy financial habits, employers incentivize employees to work toward their goals through the power of reinforcement and friendly competition. Financial wellness challenges might include:
- Saving a certain amount or income percentage every month.
- Cutting back on expenses like takeout or coffee runs.
- Creating and sticking to a reasonable budget.
If wellness program participation is flagging in your organization, click here to discover seven ways to boost engagement.
Financial Wellness Means Being Ready for Anything
Financial anxiety stems from uncertainty. And as we head toward an uncertain economic future, financial worries will continue to plague your organization’s employees. In this climate, a financial wellness program is not merely a workplace perk but an essential strategy for boosting productivity, engagement, and morale.
Innovations such as data-driven solutions, tailored communications, access to financial expertise, student loan assistance, and gamified challenges empower your employees to take control of their financial futures while helping your organization cultivate a more resilient and focused workforce.