Channel markets, Security Staff Acquisition & Development

Companies Focusing More and More on Employees’ Financial Health

Recent research from Fidelity Investments and the National Business Group on Health shows 84% of US firms 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 gives more detail by explaining that, “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.”

Different Employees Have Different Financial Needs

The benefits firms offer to help employees with their financial wellbeing will take several forms, from educational offerings to financial advice, 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.

This means that employers should think twice before adopting a one-size-fits-all approach to financial wellness. Instead, they should follow some of the more forward thinking firms and incorporate these benefits into a holistic wellbeing program built around employees’ needs and measured by how well they meet those needs.

Employees Increasingly Worried About Making Ends Meet

The growing interest HR teams 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.

They report that, “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.

Blog courtesy of CEB, now Gartner. Read more related blogs here.

Sponsored by CEB, now Gartner

Leaders at more than 10,000 organizations worldwide rely on CEB services to harness their untapped potential and grow. Now offered by Gartner, CEB best practices and technology solutions equip customers with the intelligence to effectively manage talent, customers, and operations. More at