Survey: Financial Wellness Benefits in a COVID-19 World
For many employees, the COVID-19 pandemic has revealed how fragile their financial security is. For employers, the impact of a financial wellness benefits program on their workforce now could be an invaluable resource to their employees, as well as a compelling retention and recruitment tool.
We were curious to assess the current employee landscape to find out what impact financial wellness benefits would have on their financial lives, what benefits they are most interested in, and whether or not COVID-19 has heightened their desire for more financial wellness benefits offerings (hint: it has).
To find out, SoFi surveyed* 2,050 consumers, spanning Gen Z to Boomers (both employed and unemployed, but actively searching for work) to get their take. One of the most compelling things we found is that due to COVID-19, 59% of people feel it is more important now that employers offer financial wellness benefits. Here’s what else they said:
Current State of Financial Wellness Benefits in the Workplace
We were interested in learning what financial wellness benefits employers are currently offering, including 401(k) retirement plans with or without a match, access to financial counseling, tuition reimbursement, student loan repayment assistance, 529 College Savings plans, and unlimited PTO (paid time off). We were surprised to find that 30% of employers do not offer any of these benefits.
Other findings? The most widely adopted benefit offered by employers is 401(k) with match (46%), but only 13% of employers offer student loan repayment assistance. This is notably low—especially when 63% of people who currently have student loans said they are struggling to pay off debt due to their current financial situation. (Side note: for employers interested in adding this benefit to their slate of offerings, there is currently a provision in the CARES Act that allows employers to make tax-free student loan contributions for their employees. Learn more about the SoFi CARES Program here.)
So what financial wellness benefits do people really want? We asked respondents to rank seven different benefits from most desirable (1) to least desirable (7). The results?
1. 401(k) retirement plan with match
2. Student loan repayment assistance
3. 401(k) retirement plan without match
4. Unlimited PTO
5. Tuition reimbursement
6. Assistance planning for college expenses (e.g. 529 College Savings Plan)
7. Access to financial counseling
To dive deeper, we asked respondents the following question: If your employer could make a contribution to one of your benefit accounts, which would have the most significant impact on your personal financial situation? They ranked as follows:
• Most significant impact: Employer makes a contribution to my rainy day fund/Emergency Savings account
• Second most significant impact: Employer makes a contribution (or additional contribution) to my 401(k) retirement savings plans
• Third most significant impact: Employer makes a contribution to my student loan balance
• Fourth most significant impact: Employer makes a contribution to my 529 College Savings plan or similar college savings account
Financial Stress and Employee Benefits
Financial stress can weigh heavily on an employee’s day-to-day life. In some ways, the pandemic has heightened financial stress for some employees who may be worrying about job security and managing their debt.
We asked respondents to rank their top three sources of emotional stress right now and found that the highest percentage of people (45%) chose paying for an unexpected hardship as one of their top three sources of emotional stress, followed by saving for major life milestones (e.g., buying a home, paying for a wedding, starting a family) (45%), and saving for retirement (30%).
When it comes to the correlation between stress and financial wellness benefits, 53% of people said they would feel less stressed about their overall financial situation if their employer offered financial wellness benefits. Additional findings?
• 48% of people would be more committed to staying with their employer for a longer period of time
• 37% would be more likely to recommend their employer to other friends
• 30% feel they would have better productivity at work
In thinking about their next job opportunity, over 50% of millennials and Gen Z said they would be much more likely to consider a position with an employer if they offered financial wellness benefits. Over half of millennials and Gen Z would also be more committed to staying with their employer for a longer period of time if they offered financial wellness benefits.
Finances touch every aspect of an employee’s financial life. Based on these survey results, it is clear that people are eager to work for an employer who offers a diverse array of financial wellness benefits—especially in the era of COVID-19. From contributions to a traditional 401(k) account, to an emergency savings plan, and student loan contributions, it is safe to say that these are some of the most desirable benefits for the current and upcoming generation of workers. Access to comprehensive financial wellness programs can help employees gain better control over their finances and set them up on the path to financial freedom.
*Source: Based on a SoFi/Centiment Research survey of 2,050 general population respondents from July 8, 2020 to July 9, 2020
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