Just under 20 percent of American workers had access to financial planning benefits through their employer last year, the Bureau of Labor Statistics recently highlighted at its news publication, the Economics Daily. According to BLS data from last March, these benefits were more commonly enjoyed by high-earning employees, employees of larger organizations, and those in certain skilled professions:
Employees in larger establishments (100 workers or more) were three times as likely to have access to financial planning benefits as employees in smaller establishments (1–99 workers). Workers in higher wage groups were also more likely to have access to financial planning benefits as workers in lower wage groups.
Nearly half of workers in the information and finance and insurance industries had access to financial planning benefits. Fewer than one in ten workers in construction and leisure and hospitality had access to financial planning benefits.
The BLS data belies the growing interest in financial wellbeing offerings among employers in the US and globally: Surveys have found that a large and growing majority of American employers are offering some form of financial wellbeing benefit. The employer-provided or subsidized financial planning services tallied in the bureau’s Employee Benefits Survey are just one of many ways organizations can help their employees better manage their finances.
There’s a reason why financial advisors mostly work for wealthy clients: These services are valuable, expensive, and not usually worth investing in unless you have a lot of money to manage. Over the past few years, companies have been looking into ways to provide less-wealthy individuals with the kind of financial advice previously only available to the rich, whether through technological solutions (“robo-advisors”) or through programs that allow them to access these services through their employers.
However, there are lots of other benefits that can improve employees’ financial security and reduce their financial stress, such as debt management and budgeting classes, or student loan assistance. Most Americans have at least some major misconceptions about what they need to do to plan for retirement, for example, so employers can make a difference just by educating employees on effective financial planning and clearly communicating the best ways to take advantage of benefits like 401(k) matching and health savings accounts.
While these benefits are not as fundamental to employee engagement, retention, and cost control as physical wellbeing offerings, our research at CEB, now Gartner, has found that the most effective wellbeing programs are holistic, combining physical, emotional, and financial wellbeing. Also, when creating any kind of new wellbeing benefit, it’s important to make sure that it responds to real needs among your employees and that it’s easy for them to participate. A clearly communicated, user-friendly offering that meets employees needs is far more likely to succeed than one based on the latest trend.