As their sense of responsibility grows in supporting the financial needs of their workforce, employers apparently are offering more robust and wide-ranging workplace benefits, according to new survey results.
“We are seeing the number of employers who offer comprehensive workplace benefits programs expand dramatically. This year, 95% of employers agree that they should provide workplace financial benefits and more than half (56%) say they feel an extreme responsibility to do so,” notes Lorna Sabbia, Head of Retirement and Personal Wealth Solutions at Bank of America.
Additionally, the number of employers offering financial wellness programs rose to 46%, up from 40% in 2020. Of course, company size and industry type influence the availability of financial wellness programs. For instance, 38% of employers with less than $20 million in retirement plan assets offer a financial wellness program, while 59% of those with more than $100 million in retirement plan assets do so.
These findings are from Bank of America’s 11th annual Workplace Benefits Report, a nationwide survey that examines trends contributing to an employee’s sense of holistic wellness, including what steps companies are taking to support emotional, physical and financial wellbeing, and how workplace benefits programs are evolving amid an increasingly diverse workforce.
Regarding expanded offerings, the survey found that more than 4 in 10 employers now offer support on emerging topics like saving for an emergency, paying down student loans and planning for caregiving expenses.
And even in the face of increasing stress caused by the pandemic, employees’ sense of financial wellness started to rebound in 2021 after declining the year before. In fact, more than half (51%) of employees rate their financial wellness as good or excellent, up from 49% in 2020. Additionally, more than 8 in 10 employers agree that financial wellness programs result in greater employee productivity, and more engaged, satisfied and loyal employees.
Among the key findings from Bank of America’s survey:
- Saving for retirement is a top priority, but more can be done. Saving for retirement is the top financial priority for men and women alike, however, a smaller percentage of women are prioritizing saving (34% versus 46% of men).
- Workplace benefits programs must go beyond financial topics. Employees say their mental (60%), physical (54%) and financial (46%) health significantly impacts their overall wellbeing, yet the survey found that only a third of employers communicate about mental and physical health more than two times a year.
- Health care is an area for improvement. Only 35% of employers offer a high-deductible health plan which would give employees access to a health savings account (HSA). That said, the percent of eligible employees who are saving more in their HSA increased (74% in 2021 versus 67% in 2020), while the percentage who are making regular withdrawals decreased (51% in 2021 versus 68% in 2020).
- Debt remains a challenge. Here, the survey found that 88% of black, 87% of Hispanic, 81% of white and 60% of Asian American employees currently hold some type of debt. Employers are responding to this challenge with 53% now offering help with debt as a part of their financial wellness program, up from 15% in 2013.
- Women continue to lag men in financial wellness. Only 47% of women rate their financial wellness as good or excellent versus 57% of men. Women are also more likely to feel some level of stress about their financial situation (92% versus 88% of men), and twice as likely to be kept up at night by financial stress.
- Employees want professional, personalized advice. Employees listed access to a financial advisor, information on retirement plans, and help developing good financial skills and habits as the top three areas where they desired support from employers. In fact, the percentage of employers that offer access to a financial advisor increased to 47% from 40% in 2020. Additionally, the percentage of employers that provide help developing good financial skills and habits increased to 45% from 39% in 2020.
- Younger employee populations have more gender and ethnic diversity. Women make up 69% of Gen Z and Millennial employee groups versus 51% of Baby Boomer and Silent Generation employee groups. Younger employee populations are also significantly more ethnically diverse.
In observing the more diverse workforce, Sabbia notes that diversity has been shown to bring benefits to the workplace, but it also makes delivering employee benefits more challenging. “Diverse workforces have more wide-ranging needs, but the common thread is that they are looking to their employers for help in achieving their goals,” she emphasizes.
Bank of America recommends these action steps:
- Taking time to understand what employees need to provide the guidance and education that they need, when they need it.
- Incorporating plan design features and providing access to education and guidance that helps employees track progress and nurture good financial habits.
- Providing comprehensive support to help employees save and invest towards their retirement goals.
- Investing in promoting digital resources to help drive engagement to increase employee productivity and loyalty.
- Thinking about how supporting workforce diversity can benefit the business and taking action to support diversity and inclusion across the company.
The findings are based on a survey conducted by Escalent on behalf of Bank of America among a national sample of 1,363 employees who are working full-time and participate in 401(k) plans, and 834 employers who offer both a 401(k) plan and have sole or shared responsibility for decisions made in the plan. The survey was conducted between Dec. 28, 2020, and Feb. 8, 2021.