Growing awareness of how financial wellness programs benefit employees has driven rapid growth in plan adoption among employers. Now, they say big data could help measure results, customize programs, and fill remaining gaps, according to a survey from Prudential’s Workplace Solutions Group, a business unit of Prudential Financial, Inc.
Prudential’s 10th survey of employee benefits, Benefits and Beyond: Employer Perspectives on Financial Wellness, finds the percentage of employers offering financial wellness programs rose to 83%, up from 20% in the survey two years earlier. An additional 14% of employers say they plan to offer these programs in the next one or two years. The survey includes responses from nearly 800 decision-makers for group insurance benefits at United States businesses with at least 100 full-time employees.
“Our survey reveals that employers and employees report higher satisfaction with their benefit plans when financial wellness programs are offered,” said Vishal Jain, financial wellness officer for Prudential’s Workplace Solutions Group. “Employees increasingly look to their employers to help them achieve financial security, and employers are seeking data and insights on how to respond and influence better outcomes.”
Prudential’s survey examines varying employer attitudes about financial wellness, as well as common kinds of financial wellness programs, top metrics of success, and potential barriers to implementation:
· Employers who offer financial wellness are more satisfied with their total benefits program (61%), than those who do not (44%).
· Larger employers were more satisfied with their financial wellness offerings (72%) than medium (54%) or small employers (50%).
· Most large employers (61%) believe data sharing is employees’ biggest barrier to participation in financial wellness programs, citing “privacy concerns” and “putting together all the data and information.”
· Overall, retirement plan and benefit providers are the preferred providers of financial wellness.
· Criteria for selecting financial wellness providers are primarily driven by cost, ease of implementation, and expertise.
Despite recent shifts in employment toward gig and other alternative work arrangements that challenge the traditional employer-employee relationship, the survey finds that most employers are committed to offering employee benefits:
· The three most critical outcomes employers want their benefits strategies to achieve are to attract and retain talent, improve employee productivity, and assure employees that they care about their financial well-being.
· Sixty percent of employers believe they should provide benefits to employees and only 15% say employees should be responsible for their own financial well-being and future.
· Almost two-thirds (64%) believe their employees are highly satisfied with their overall benefits package, up from 41% in the previous survey.
· A third of employers say they should be responsible for paying for all the costs of the employee benefits they offer.
According to the survey, employers primarily rely on employees to tell them what kinds of financial wellness programs they need and how to measure the success of the programs. Methods used include surveys and informal feedback, analysis of internal data around Section 401(k) loans or withdrawals, as well as wage garnishments. More than two-thirds measure the impact of their financial wellness programs at least quarterly.
“Employers recognize the best way to support employees is to understand their needs,” Jain said. “As financial wellness becomes the rule rather than the exception, financial services providers that can use data to help employers develop better programs and communications for employees will be increasingly valued.”