Where Are Financial Wellness Benefits Headed?

Workers may be getting more from their employers in coming years. Among employers currently offering financial wellness benefits, 80% expect to provide even more next year, while only about 20% expect to remain at the same level, according to Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute.

Copeland shared the data in a Tuesday webinar that presented early results from EBRI’s 2023 Financial Wellbeing survey fielded in July and August. The full report will be released later this month. The firm surveyed full-time benefits decisionmakers at employers with at least 500 employees, covering more than 250 companies. The research found that, unlike previous years, the top financial wellness concern for employers was driven in part by inflation.

“The high cost of living was an important aspect that employers were looking to help with. That came out on top,” Copeland told the virtual audience. “When we’ve done this for the last five years, retirement preparedness or health care costs have been the main focus. But given the persistence of high inflation, employers have really tried to step up in our financial well-being programs.”

Respondents to the survey listed the five most widely offered benefits as:

• Employee discount programs/partnerships (60%);
• Basic money management tools (55%);
• Financial investment/investing education, seminars or webinars (55%);
• Financial planning education, seminars or webinars (53%);
• Tuition reimbursement and/or assistance (50%);

But rising prices do not just hit participants. The price of financial well-being options remains the main challenge for employers as they consider adding benefits and expanding programs, Copeland said. Even so, benefits decisionmakers reported their employers are likely to step up and provide more money for these programs.

“Because [programs] are gaining in popularity, we see that 70% either expect their budget to increase somewhat or increase significantly,” he said. “It’s interesting that the other 30% expect budgets to stay the same. No one is expecting their budget to go down.”

Among eligible employees, the use of benefits was still low. One-third of employers had at least 50% of employees participating or engaging in benefits, but the majority saw between 26% and 50% of eligible employees actually taking advantage of these programs.

“It’s still pretty much on the low side of eligible employees,” Copeland said. “However, when you ask what the employer expected the take-up to be, 60% of the employers are saying that it’s actually more than what they had expected. 33% said it’s about what they expected. Only about 5% to 6% said that it is less than expected.”

When comparing the approach taken by firms of different sizes, Copeland said larger employers showed more hesitation to provide workplace benefits, whereas when smaller employers were interested, they were more likely to be in the process of implementation.

“[Employers with] 10,000 or more employees were a little more hesitant of offering [financial wellness benefits],” Copeland said. “It looks like they’re being a little more restrictive or not as expansive in their benefits, compared [with] what smaller employers are offering.”