Most HR professionals and employees agree that companies have a responsibility to ensure workers are not only mentally and physically well but financially well, too.
The 2024 Employee Benefit Research Institute (EBRI) Financial Wellbeing Employer Survey found that over 90% of benefits decision-makers who are offering or considering offering a financial wellness program agree their firm is responsible for workplace “wellness.” Of those offering financial well-being programs, an average of five different financial well-being benefits are being offered. These offerings range from debt management to payroll advance loans to emergency savings programs and more.
The primary focus areas of employer-sponsored financial well-being programs are retirement planning, investments, and basic financing. However, companies are also looking to address a range of important employee concerns with their financial wellness initiatives, such as healthcare costs, cost of living, financial-related stress, and money management.
Given that 84% of employers pay the full cost of the financial well-being benefits they offer and that the median annual cost per employee is $1,000, it’s not surprising that HR professionals are tasked with ensuring these financial well-being initiatives deliver tangible results. The EBRI survey provides some valuable insights on measures of success and the data tracked to evaluate effectiveness.
The data doesn’t lie
Examples of the data employers leverage to gauge the success of financial well-being programs include increased employee productivity, higher employee retention, and improved overall worker satisfaction. Improved usage of existing employee benefits, such as retirement plans and health savings accounts, is another important success measure. Employers also utilize employee satisfaction with financial wellness benefits themselves as a measure, often examining this in terms of the utilization of the financial well-being benefits offered. Fifty-seven percent of HR professionals surveyed said that more than half of eligible employees were using the benefits they offer. When asked how that number aligns with expectations, 60% of firms offering these benefits said that the share using them was higher than expected.
Seventy percent of HR professionals in the EBRI survey developed a cost-benefit analysis to determine the return on investment of their financial well-being offerings. This analysis most commonly used analytics that examine improved employee financial well-being, improved productivity and performance, and improved employee recruitment/retention. Improved absenteeism/tardiness was also commonly cited in formulating cost-benefit analyses.
Future trends in financial well-being initiatives
However, we know employee needs aren’t one-size-fits-all. Companies are taking specific actions to address inclusivity in their financial well-being initiatives through actions and offerings targeted at different employee demographics. For example, some companies ensure that financial counselors and coaches are relatable to all groups of employees. To understand the financial well-being needs of all their workers, companies use data analysis, employee surveys, and financial wellness needs assessments. Employee resource groups are another valuable source of information on employee well-being needs.
In 2025, we expect companies will add emergency savings programs, child/elder caregiving benefits, and hardship assistance funds to financial well-being programs, based on the EBRI survey. As these programs expand, HR professionals’ understanding of how to measure the success of financial well-being programs will be crucial. By tracking key metrics and conducting thorough cost-benefit analyses, employers can ensure financial wellness initiatives are effective and provide a positive return on investment. As these programs continue to evolve, they will play an increasingly vital role in enhancing satisfaction, productivity, and overall well-being for all employees.
