January 23, 2020
Although saving for retirement is the top priority for employees who are financially secure, it’s far less of one for employees with financial worries.1 Areas where employees in the U.S. would like more employer based support relate to their current financial concerns, including lowering health care and prescription costs, as well as housing and transportation costs.2
Culturally, policies and saving practices vary by country. For example, 61% of people in India are “habitual savers” meaning they identified as having a retirement plan, are adding to retirement savings, and are on track to meet their goals in contrast to 46% in the U.K. and 34% in Brazil.3
Employees in the U.S. have identified the following financial areas in which they would like to have more help from their employer:2
Globally, employers are supporting employees in variety of ways beyond retirement benefits, including offering commuter vouchers and allowances, on-site creche benefits and tuition and education reimbursement, along with meal vouchers and cafeteria subsidies. Financial education and awareness have also become increasingly important globally, as employers move to defined contribution plans. Some employers report using their EAP to help employees with budgeting and retirement planning.
Design financial well-being benefits and programs with your population in mind.
Key questions to consider when developing your strategy include:
- What’s the demographic profile of your global workforce (e.g., low-wage earners, high-income potential employees, recent grads)?
- What are your employees’ most pressing financial challenges (e.g., paycheck volatility, student loan debt)?
- What public programs do employees have access to around the world?
Use this information, which can be gleaned from surveys, focus groups, HR data and publicly available information, along with a consideration of your company culture, to design initiatives that meet your employees’ needs.
Consider words carefully.
When rolling out your financial well-being initiative, think about the words that may resonate with your audience – and those that don’t. “Finances,” for example, may not mean much to your population but “money” may.
When assessing programs, consider if they offer expertise in multiple topics (e.g., budgeting, reducing debt, estate planning, retirement, etc.).
The decisions employees make in one area of their financial life may impact other areas; programs that offer functionalities or expertise in a variety of disciplines may help employees navigate their financial journey smoothly.
Focus on action not just education.
Studies have found that financial programs designed to help participants take action to address personal finance concerns (e.g. building short-term savings, paying down debt) are more effective in reducing financial worries compared to programs focused on education (e.g., reviewing retirement savings).4
Consider how your health care benefits may impact the financial security of low-wage employees.
As premiums and deductibles continue to rise, think about developing strategies that reduce the financial burden on low-wage employees. Options include using salary-based account contributions, deductibles and premiums. Also, assess your incentive strategy to ensure that low-wage workers have ample opportunity to earn incentive dollars (e.g., do you offer time on-the-clock for incentive-related activities?).
- 1 | Willis Towers Watson. 2017/2018 global benefits attitudes survey. 2017. https://www.willistowerswatson.com/en-US/insights/2017/11/2017-global-benefits-attitudes-survey-financial-well-being. Accessed June 3, 2019.
- 2 | The National Business Group on Health and Optum. Workplace well-being and the employee experience survey. 2019. https://www.businessgrouphealth.org/resources/workplace-well-being-and-the-employee-experience. Accessed July, 1, 2019.
- 3 | Umpierrez A. Retirement readiness from a global perspective. Plan Adviser. https://www.planadviser.com/exclusives/retirement-readiness-global-perspective. Accessed November 4, 2019.
- 4 | Leana C. The cost of financial precarity. Stanford Social Innovation Review; Spring 2019. https://ssir.org/articles/entry/the_cost_of_financial_precarity. Accessed July 11, 2019.