Programs evolving in the COVID-19 Era focusing more on emergency assistance, less on student loan debt repayment programs and tuition reimbursementNew research from the Employee Benefit Research Institute measures the deeper impact of COVID-19 on employee financial well-being. Visit here to read the full report.
A new study from EBRI’s Financial Wellbeing Research Center finds that 90 percent of companies answering the 2020 EBRI Financial Wellbeing Employer Survey either have or are developing a strategy for improving their employees’ financial wellbeing. More of these offerings are maturing into holistic, integrated programs rather than the ad hoc programs that were more prevalent in previous years.
The report, “2020 EBRI Financial Wellbeing Employer Survey: COVID-19 Driving Benefit Offerings and Potentially Forcing Tough Budget Decisions,” finds companies are looking to demonstrate the impact of financial wellbeing programs on the bottom line with increased productivity as opposed to being primarily focused on the attraction and retention of employees.
The programs have also evolved from a focus on retirement preparedness to a more complete picture across all aspects of an individual’s finances. With the hope of reducing employees’ financial stress and increasing productivity, companies are looking for a financial wellbeing score or metric to assess the impact of financial wellbeing programs.
“Financial wellness providers that can clearly make this case will be more successful in attracting clients,” said Craig Copeland, EBRI Senior Research Associate and author of the report. “However, there are no clear measures that have been developed to measure productivity increases from financial wellbeing programs and other bottom-line issues. This will continue to be an area of focus and research within the financial wellbeing arena.”
Excerpts From The EBRI Survey
The third annual Employee Benefit Research Institute (EBRI) Financial Wellbeing Employer Survey showed that financial wellbeing programs appeared to be maturing in that they are more likely to be holistic programs instead of pilot or ad hoc initiatives. In addition, the survey found that employers overwhelmingly have developed or are developing formal strategies to improve their employees’ financial wellbeing.
At the same time, the uncertainty surrounding the COVID-19 pandemic may restrict what can be done with these programs as well as the programs being offered. With costs being reported as the top challenge in offering financial wellbeing programs, employers are likely to need to have these strategies well formulated to demonstrate that they not only help employees but benefit employers’ bottom line.
Other important results:
- In 2020, the proportion of employers that expressed at least some interest in implementing financial wellbeing benefits was essentially unchanged from 2018 and 2019. However, the proportion that said they are actively implementing such a program has increased
- The top issues addressed through financial wellness initiatives were health care costs and retirement preparedness; the areas of focus of the initiatives were retirement planning and basic finance and budgeting.
- Personalized credit/debt counseling, coaching, or planning is one financial wellbeing benefit that saw an increase in prevalence in 2020. The benefits that declined in prevalence were employee discount programs/partnerships, tuition reimbursement, and bank-at-work partnerships
- The employers that paused or discontinued financial wellbeing benefits in response to COVID-19 were in the minority
Employee engagement in specific financial wellness benefits already being offered increased most among those offering more immediate overall financial help such as emergency fund/employee hardship assistance, short-term loans through payroll deduction, payroll advance loans through the employer, and debt management services
- Nearly two-thirds of the employers implemented some provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The most likely provision said to be implemented was allowing coronavirus- related distributions (CRDs) from their retirement plan
As these programs mature and employers bear much of their cost, companies report interest in showing the impact of financial wellbeing programs on the bottom line through increased employee productivity. The programs have also evolved from a focus on retirement preparedness to a more complete picture across all aspects of an individual’s finances. With the hope of reducing employees’ financial stress and increasing productivity, companies are looking for a financial wellbeing score or metric to “prove” the impact of financial wellbeing programs.
Financial wellness providers/vendors that can make this case will be the ones more successful in attracting clients. However, there are no clear measures that have been developed to measure productivity increases from financial wellbeing programs and other bottom-line issues. This will be an area of focus and research within the financial wellbeing arena.
The 2020 Financial Wellbeing Survey was sponsored by Church Pension Group, Financial Finesse, HealthEquity, International Foundation of Employee Benefit Plans, J.P. Morgan, MassMutual, Mercer, Morgan Stanley, Principal Financial Group, and Prudential Financial.
To get involved in the 2021 survey, contact EBRI