Employers have long recognized that critical benefits such as health care and retirement savings are essential to attracting and retaining great employees. But whether employees are leveraging benefits to improve their financial wellness is another story.
What’s more, nearly four in 10 employees spend three or more hours each week thinking about their finances.1 This is where advice and guidance benefits can help connect the dots, providing employees with advice and guidance to navigate their financial lives successfully. And the advantage isn’t just to the employees.
The Return on Investment (“ROI”) of financial wellness benefits makes them a worthwhile investment for employers. Advice and guidance can help:
- Improve employee plan engagement,
- Increase productivity, and even
- Boost employee retention.
A workforce under stress
Today’s employees are already stressed about their finances — and the prospect of a recession and continued inflation isn’t helping. Consider that half of the employees spend more than they earn each month, and more than a third feel like their debt is unmanageable.2 Also, two out of five employees don’t have enough emergency savings to cover three months’ expenses.3
If today’s financial stress is concerning, employees’ worry about their future is even more so. Fifty-one percent of employees say that the pandemic significantly increased their concern about their ability to retire.4 More than one-third of employees plan to push back their retirement by six or more years to be more financially stable.5
These stressors certainly impact employees’ home lives, but they also flow into work. Financially stressed employees are more likely to be absent, less satisfied with their salaries, and more apt to waste time at work. In fact, 37% of employees say they spend three or more hours each week thinking about their finances.6 And 22% of HR professionals say financial stress substantially impacts employee engagement.7
A benefits package that includes advice and guidance can help alleviate this stress. The benefits can help improve employee financial and mental wellness and can help boost company performance. Most importantly, given the opportunity, employees will leverage this support. Consider that 84% say they would value a financial advice benefit from their employer.8
ROI in dollars and more
Financial coaching could yield immediate returns in terms of improving employees’ financial wellness. But the ROI of these benefits may go beyond employee bank and retirement accounts. The potential ROI of financial advice and guidance for employers may include:
- Increased productivity. Employees with money worries are six times more likely to say that financial stress has impacted their productivity.9 They’re also seven times more likely to say that their financial stress has caused them to miss work.10 Financial wellness programs offer strategies and solutions designed to help improve financial wellness and reduce related distractions. As a result, employers may benefit from productivity gains that make financial wellness programs more than worth it.
- Improved benefits engagement. Financial wellness programs improve benefits engagement as employees recognize the value of the benefits and leverage them for their economic benefit. This is especially important in terms of closing gaps in engagement across employee groups. For example, 65% of white employees contribute to their employer-sponsored 401(k)s, compared to 44% of Black employees and 28% of Hispanic employees.11
- Increased employee loyalty and retention. Financially stressed employees are twice as likely to look elsewhere for a job.12 And more than three-quarters of financially stressed employees say they’re attracted to companies that care about their financial well-being. Financial wellness benefits help employees reduce their financial stress and, in the process, improve their view of their employer. As a result, they’re more apt to stay in their current positions instead of looking for a new place to work.
ABA Retirement Funds Program advice & guidance services
With the ABA Retirement Funds Program’s (“Program’s”) advice & guidance suite of solutions, employers can unlock the advantages of financial wellness for their employees and business. We provide a comprehensive suite of in-plan, one-on-one and online advice and guidance services designed to help employees chart the best path forward with more confidence. Our solutions meet Program participants where they are, offering guidance across four pillars that comprise a healthy financial life:
- Saving and investing. Employees can tap into one-on-one coaching and support to help them achieve their short- and long-term savings goals.
- Retiring. Advice & guidance offers employees financial coaching and in-plan managed account advisory services to help all employees be more prepared for retirement.
- Planning and protecting. Our services can also help employees protect their families and financial future via estate planning and caregiving support.
- Navigating life changes. Employees can access financial guidance to help with planned and unexpected life events — like health needs, marriage, children, special needs diagnosis or disability, divorce or making a career change.
Our advice & guidance solutions help empower employees to improve their financial wellness and to feel more confident about their financial decisions. Employees who are enrolled in in-plan advisory services are 145% more likely to increase their savings compared to those who are not.12 In turn, they can also benefit employers by creating a financially healthy workforce that’s potentially more engaged, productive and likely to stay and thrive at their current employer. Tap into this suite of benefits and help employees take their next best step, no matter where they are in their financial journey.
Advice & Guidance at every turn
The Program’s advice & guidance service options help employees make more informed financial choices. Our comprehensive suite of in-plan solutions is designed to meet employees at each stage of their financial journey — and help them confidently chart the best path forward. Learn more.
Sources:
1. https://www.enrich.org/blog/is-financial-stress-killing-your-employee-productivity
2. https://www.enrich.org/blog/the-secret-to-conquering-employee-financial-stress
3. https://www.enrich.org/blog/the-secret-to-conquering-employee-financial-stress
4. https://www.hrdive.com/news/pandemic-increased-employee-stress-about-retirement/624454/
5. https://www.benefitnews.com/news/sofi-found-that-employees-have-high-levels-of-financial-stress
6. https://www.enrich.org/blog/is-financial-stress-killing-your-employee-productivity
7. https://www.enrich.org/blog/is-financial-stress-killing-your-employee-productivity
8. Closing the Financial Advice Gap, Edelman Financial Engines white paper, 2019
9. https://www.pwc.com/us/efwsurvey
10. https://www.pwc.com/us/efwsurvey
12. Voya study of participants offered Financial Engines advisory services in 2019 comparing savings rates 6 months before and after enrolling in professionally managed services to a similar timeframe for randomly assigned groups of individuals who did not use professionally managed or online advice services.
For plan sponsor/employer/consultant/financial professional use only. Not for use with plan participants or the general public.
Advisory Services provided by Voya Retirement Advisors, LLC (VRA). VRA is a member of the Voya Financial (Voya) family of companies. For more information, please read the Voya Retirement Advisors Disclosure Statement, Advisory Services Agreement and the ABA Retirement Funds Program’s (“Program’s”) Fact Sheet. These documents may be viewed online by accessing the advisory services link(s) through the Program’s web site at abaretirement.com after logging in. You may also request these from a VRA Investment Advisor Representative by calling the Program’s information line at 800.348.2272. Financial Engines Advisors L.L.C. (FEA) acts as a sub advisor for Voya Retirement Advisors, LLC. Financial Engines Advisors L.L.C. (FEA) is a federally registered investment advisor. Neither VRA nor FEA provides tax or legal advice. If you need tax advice, consult your accountant or if you need legal advice consult your lawyer. Future results are not guaranteed by VRA, FEA or any other party and past performance is no guarantee of future results. Edelman Financial Engines® is a registered trademark of Edelman Financial Engines, LLC. All other marks are the exclusive property of their respective owners. FEA and Edelman Financial Engines, LLC are not members of the Voya family of companies. © 2024 Edelman Financial Engines, LLC. Used with permission.
Financial Professionals are investment advisor representatives and/or registered representatives of, and securities and investment advisory services are offered through Voya Financial Advisors, Inc. (member SIPC). Investment advisory services are only offered through investment advisor representatives of Voya Financial Advisors.
Neither VFA nor its registered representatives offer legal or tax advice. For tax or legal advice please consult with your attorney or tax advisor.
Please read the Program Annual Disclosure Document (April 2024) carefully before investing. This Disclosure Document contains important information about the Program and investment options. Contact us at: [email protected].
Financial education provided in person or over the phone is provided by registered representatives of Voya Financial Advisors, Inc. (member SIPC).
Financial planning and investment advisory services offered for assets outside of the employer sponsored plan are provided by investment adviser representatives of Voya Financial Advisors.
The Voya family of companies and the ABA Retirement Funds Program are separate, unaffiliated companies and not responsible for one another’s products and services.
CN3553052_0526