Where is the Disconnect Between Employers and Employees?

Many employers are spending money on benefits that do not match the objectives of their workforce, based on a recent survey by Payroll Integrations, which connects payroll provider programs with employers.

According to Payroll Integrations’ recent survey, summarized in the 2024 State of Employee Financial Wellness Report, only 18% of workers expressed interest in the programs their employers are now funding. While 41% of employers indicated they intend to increase their spending on financial education and planning services, workers would rather see their employers make larger investments in retirement plans (43%) and health insurance (54%).

“Employees are feeling the financial pressure from inflation, higher costs of living and the rise of insurance costs and now, more than ever, employers feel a responsibility to step in to help support their financial well-being,” said Doug Sabella, Payroll Integrations’ CEO, in a release that accompanied the report. “But there’s a clear disconnect between what employers think employees want in terms of financial wellness offerings and benefit programs and what employees feel they need to make a difference.”

While workers in Generation Z want their companies to make lifestyle benefits top priority, older generations place more emphasis on health care and retirement, Payroll Integrations found. Baby Boomers ranked pensions as the most essential benefit, Gen X and Gen Y workers selected additional compensation, Millennials prioritized health savings accounts, and Gen Z employees picked lifestyle compensation.

Know Your Employee

Chris Weirath, a senior vice president and head of business development and client success at Morningstar, recommends that employers understand their employees’ perspective to deliver meaningful wellness and saving tools.

“You can’t force participants to take advice,” says Weirath. “You have to meet people where they are with targeted and useful communication.”

According to the Payroll Integrations report, there is a disconnect between how employers feel they are doing in terms of supporting their employees’ financial well-being and how their employers feel.

According to the study, 49% of employers feel they are fully supporting their employees’ financial well-being, compared with just 28% of employees who feel they are being supported by their workplace. Meanwhile, 95% of employers feel it is their duty to promote their workers’ financial security, but just 36% of workers say they feel totally stable financially.

The Disconnect

Weirath of Morningstar says that a “broad message blanketing everyone” will have little chance of success in engaging and getting response from participants. Rather, financial wellness providers and platforms should be looking to leverage data to target communication to accompany relevant plan rules or changes or to coincide with broader life events such as getting married, buying a home or nearing retirement age.

According to Weirath, Morningstar is looking to leverage participant data in appropriate ways via the plan sponsors themselves, recordkeepers or financial wellness platforms that aggregate participant data. Payroll providers, she notes, may be another source of information to better target participant communication at times they might actually need it.

These benefits best practices could have a substantial impact in attracting and retaining employees. A potential employee’s decision to accept a job offer can be strongly influenced by the benefits that employers provide, according to Payroll Integrations. The majority of workers stated that if benefits like retirement plans (67%) and health insurance (65%) were not included, they would not accept a new job offer.

Companies did agree on the importance of these benefits, viewing health insurance (70%) and retirement plans (80%) as the most important advantages for luring and keeping workers.

Payroll Integrations’ report draws on responses from 250 full-time employees between the ages of 18 and 65 and HR leaders.