New report from San Francisco-based firm reveals that HR needs to improve when it comes to supporting financial wellness
More than half of employees (51%) were more stressed about their finances in 2021 than ever before.
With the worst of the COVID-19 pandemic seemingly in the rear view, employees are ready to face their challenges, but they aren’t sure where to begin and they aren’t getting the support they need from their employers. That’s the main takeaway from a new survey by San Francisco-based financial services firm SoFi at Work, which partnered with independent research firm Workplace Intelligence to poll 800 HR leaders and 800 full-time employees.
According to the survey, nearly 29% of employees struggle to afford basic expenses like rent, mortgage and/or food. The mounting stress, especially considering historic inflation and record-breaking gas prices, is taking its toll on morale and wellbeing. More than three quarters (76%) of workers said they think about their financial situation while at work. Even worse, they’re spending at least 14 hours per week actually dealing with financial issues and nine of those hours occur during the workday.
“Today’s business leaders are facing a daunting set of growing concerns around some of the biggest business challenges in recent history, like talent scarcity, increasing concerns around the impact of rising inflation on compensation (67%), and others,” said Jennifer Nuckles, EVP and Group Business Unit Leader, SoFi. “With this, it’s important to realize that there are other levers employers can – and should – pull to add value. One size does not fit all when it comes to financial well-being and financial education. The research we published today provides employers with actionable insights and forward-looking perspectives on employee expectations to help provide a roadmap for the future of workplace financial well-being.”
Here's the kicker: HR leaders reported that their employees are better off financially versus what workers themselves reported. This lack of awareness is probably due to most companies failing to evaluate their workers’ financial status. Less than half of HR leaders said their company has assessing their employees’ wages (45%), use of savings tools (40%), use of financial planning tools (35%), spending habits (24%) and/or debt (21%).
Read more: Betterment GM: California companies are increasingly adopting retirement plans
“There’s a misconception in the market that financial wellness is a ‘nice-to-have’ benefit,” Neha Mirchandani, chief marketing officer and head of people at BrightPlan, a Los Gatos, CA-based HR tech firm, told HRD. “In reality, it’s a must have, a strategic imperative. In the past, there was this concept that finances are an individual’s responsibility only. But forward-thinking companies are looking at financial wellness as a key lever.”
After all, employee preferences are changing, and companies need to adjust their financial benefits and strategy accordingly. Employers who adapt to the needs of their workforce will not only help their people achieve financial success, but they’ll also benefit from having healthier, happier and more productive employees. According to the survey, the top five financial wellness benefits employees want their company to add, improve or expand upon are an emergency savings fund (64%); retirement/401(k) matching (64%); financial planning tools (62%); budget planning tools (61%); and homeownership assistance (60%).
Although employees value the financial wellness benefits they do currently have, 38% of workers, on average, aren’t using them. The two main reasons for this, according to the survey, are lack of quality and lack of awareness. Around one out of five workers reported that the quality of their financial benefits is poor (23%), they’re not sure how to get started (21%) and/or they weren’t aware of such benefits (19%).
Around half of employees (but just a third of HR leaders) said that their company rarely (or never) communicates with workers about their financial benefits and wellbeing. This means that most employers could be doing a better job of communicating, especially when you consider the widespread state of information overload that today’s employees are dealing with.