Financial Health Takes Focus as US Employers Expand Wellbeing Offerings

Financial Health Takes Focus as US Employers Expand Wellbeing Offerings

The latest research from Fidelity Investments and the National Business Group on Health shows that 84 percent of American companies now include some form of financial security programs for employees as part of their overall wellbeing strategies, up from 76 percent in last year’s survey, Employee Benefit News reports:

The most popular financial security programs are seminars and “lunch-n-learn” programs with 82% of employers expected to offer these this year. Nearly three-fourths also say they will offer access to tools to support key financial decisions including mortgages, wills and income protection. Further, another 71% expect to offer tools and resources to support emergency savings, debt management and budgeting. Student loan counseling or repayment assistance programs are also expected to be offered by roughly a quarter of the employers surveyed.

Physical and emotional wellness also continues to trend upward in program offerings. Currently, 55% of companies offer a “sit-to-stand” ergonomic desk or treadmill workstation, up from 43% last year, the research says. Wearables also remain impactful to these programs, and more employers are tapping into that technology, with 30% saying they will offer subsidies or discounts on wearables this year.

Financial wellbeing benefits can take several different forms, from educational offerings to financial advising, and different cohorts of employees will have different needs in this regard—just as employees’ physical and mental health needs may differ by age, gender, or other factors. That’s why employers should think twice before adopting a one-size-fits-all approach to financial wellness; instead, progressive companies are incorporating these benefits into a holistic wellbeing program built around employees’ needs and measured by how well they meet those needs.

The increasing interest organizations are taking in their employees’ financial security may be a reflection of the fact that employees themselves are more worried about their financial futures. At the Harvard Business Review, Jonathan Morduch and Rachel Schneider present the findings of their recent analysis of the US Financial Diaries, a project that tracked the day-to-day cash flow of 235 American households for an entire year to get a more detailed picture of the financial health of the typical American family:

Our first big finding was that the households’ incomes were highly unstable, even for those with full-time workers. We counted spikes and dips in earning, defined as months in which a household’s income was either 25% more or 25% less than the average. It turned out that households experienced an average of five months per year with either a spike or dip. In other words, incomes were far from average almost half of the time. Income volatility was more extreme for poorer families, but middle class families felt it too.

This income volatility is the result of broad shifts in the labor market. As employment in the service and retail sectors has grown, and dynamic staffing policies have spread, more workers depend on income from commissions, tips, and hourly work with fluctuating schedules. The unemployment rate has been low (under 5% nationally), but that doesn’t necessarily create stable incomes: Half of the volatility we saw was due to variation in the size of paychecks within the same job.

Other researchers have issued similar warnings about the advent of the gig economy, as more and more people rely on part-time, temporary, and contract work to make a living as opposed to full-time, regular employment. As incomes become more variable and less predictable, employees could face new financial challenges, and that has implications for their employers’ financial well-being programs as well.