Employee expectations have shifted. At companies large or small, employees now expect benefits offered to go well beyond the usual basic elements of traditional programs. Employees now want to see financial wellness and financial education as part of their standard employee benefits program.
While many employers now also feel more of a genuine responsibility to help their employees manage their financial wellness, employee financial wellness has still been on a dramatic decline. In 2018, 61% of employees rated their own financial wellness as good or better than average. Today that number dropped by over 20%.
It's understandable that financial wellness can be influenced by a wide range of factors and is likely to fluctuate over time but this trajectory is not pointing to a better future for most employees.
The top reason for the lack of overall progress by the majority of employees. Lack of funds after their monthly expenses, underscoring the need for financial wellness programs that address both employees’ short- and long-term financial goals. When employees struggle to meet their short-term financial obligations, they are less likely to be able to focus on their long-term goals. Helping employees address topics like budgeting and saving will help create a sense of confidence in employees and offer up actual actionable skills that can help employees allocate their income differently going forward.
In addition to a lack of money left at the end of the month, control over debt is also be preventing many employees from making progress towards these financial goals. Debt maintenance costs eat into funds that could be used towards current expenses or long-term savings goals.
Financial wellness programs also need to accommodate the fact that different employees may need different levels and intensities of financial support. Women have been seen to to lag their male counterparts in feeling financially well, and younger employees tend to lag their older counterparts, having much less experience pursuing any financial goals whatsoever.
The introduction of these programs at more employers is now essential. Employers need to introduce programs that will promote good habits and positive financial decision-making to help employees navigate changing market environments and better manage their evolving goals,
even more important now as we target to enter the post coronavirus world.