Employers are growing increasingly concerned about the financial well-being of their workforce and are looking for new ways to improve the long-term financial health of their employees this year, according to a recent Aon Hewitt survey.More than 400 U.S. companies, representing nearly 10 million workers, were asked about their current and future approach to financial wellness benefits. According to Aon Hewitt, 76 percent of companies surveyed are somewhat or very likely to expand their focus on the financial well-being of their employees in 2014.
An Aon Hewitt spokesperson says that in the past, companies were primarily concerned about whether workers were participating in their 401(k) plans, but they are now seeing employers expand their focus beyond just retirement savings to help workers improve their overall financial health. A growing number of companies are offering tools and services to help employees make smarter financial decisions, which can help improve employee engagement and productivity as workers focus less on financial stressors.
According to a separate Aon Hewitt survey of more than 2,800 workers and their dependents, an individual’s financial situation is the most commonly cited stress factor, and 51 percent of workers surveyed said that stress caused them to be less productive at work.
To help workers better manage their financial health, Aon Hewitt’s survey shows companies are planning to take the following steps in 2014:
1. Providing help to manage budgets. A growing number of employers realize that basic money management plays a critical role in an individual’s financial well-being. To ensure workers are able to pay for day-to-day living expenses, a quarter of employers are very likely to provide some assistance to employees to help with budgeting.
2. Offering tools and resources to improve saving and investing decisions. Aon Hewitt’s survey found that more companies plan to offer access to advice, tools and resources that help employees examine their overall financial picture. Increasingly these resources allow workers to consider a variety of factors including expected retirement date, all income sources—not just their paycheck from their employer, and other details of their personal financial situation.
3. Simplifying investment options. Employers continue to offer options to provide workers with a simple and straightforward approach to investing. Most employers (79 percent) offer target-date funds in their defined contribution plans as a turn-key approach to saving. Of those that do not currently offer them, 36 percent are somewhat or very likely to add this feature in 2014. More than a third (39 percent) of companies offer managed accounts, with nearly one quarter (24 percent) of the remaining group somewhat or very likely to offer them in the year ahead.
Additionally, with employers recognizing the need to help employees improve their financial health, there’s a definite opportunity for brokers to offer our employee purchase program and the financial education tools that accompany it as a voluntary benefit.