In 2024, improving employees’ financial wellness is more important than ever, given the sustained economic pressures continuing to burden American workers. A November 2023 survey found that more than 6 in 10 employees say that money is a somewhat or significant source of stress.
 

Investing in the financial wellness of your employees is more than a compassionate gesture; it's a strategic move that can yield long-term benefits for both your workers and your organization. As you embark on the quest to assemble the best financial wellness benefits package for your business in 2024, it’s essential to evaluate what did and didn’t work in 2023 and ensure it reflects the changing needs and priorities of your diverse workforce.

Financial Wellness Benefits for Employees: 2023 Trends Recap

As we look back at 2023, there are concerning signs of a disconnect between employers’ desire to improve their employees’ financial well-being, what they currently provide, and what employees truly need.

Going into 2023, the majority of employers said they felt strongly that they had a responsibility to invest in the overall health of their employees, including their financial health. Company leaders uniformly felt they had a responsibility to make sure employees were mentally and emotionally healthy (96% of respondents agreed), physically healthy (95%), and financially secure (92%).
However, the survey of over 250 companies with 500 or more employees found that just 54% offered financial wellness benefits. Another 29% were “in the process of implementing” an initiative in that area.

These figures indicate that the pace of adoption of financial wellness benefits is far slower than it ought to be: there’s a concerning gap between companies’ intent and execution.

Perhaps even more worrying, when we look at existing financial wellness programs, investments and retirement planning are still the top-cited primary focus. Basic financial education and consulting programs come in second place.

Interestingly, the costs to both the employer and the employee were cited as the top barrier to offering financial wellness programs. However, other data suggests that these concerns are misplaced: Many business owners may overestimate the costs of these programs… by as much as five times!

Emerging Trends in 2024: What to Watch For

In considering what a good financial wellness program looks like and what it can—and should—contain, let’s begin by looking at some sobering numbers:

• Money is the No. 1 stressor in America today.
• 92% of employees are stressed about their finances.
• The high cost of living—paying household bills, making it paycheck to paycheck, and a lack of emergency savings—has overtaken retirement savings for the first time as employees’ top financial stressor. In years gone by, retirement preparedness or health care costs were the main focus.
• Nearly two-thirds of Americans don’t expect their personal finances to improve in 2024. Continued inflation is to blame for this financial pessimism. 61% of Americans who say their finances won’t improve during the year say continued high inflation is the culprit.
• Following a three-year pause, payments on federal student debt officially resumed in October 2023. However, approximately 40% of the 22 million borrowers who had bills due did not make their payments by mid-November. This number sheds light on the financial struggles faced by everyday Americans already grappling with rising housing costs, increased automobile debt, and higher food bills.

In 2024, impactful financial well-being programs help employees better understand how to budget, save, and spend in an inflationary environment. Initiatives might include financial counseling, financial literacy workshops, savings and budgeting tools, and Earned Wage Access to provide instant liquidity if workers face an emergency expense between paychecks.

Also, be mindful that your employees have diverse needs and preferences, so look for personalized packages that allow employees to choose the benefits that best align with their individual circumstances and priorities.

5 Best Practices for Designing Effective Financial Wellness Programs for Employees in 2024

Start with the Data

One size fits nobody. And financial wellness can mean different things to different people. Find out what’s happening in your people’s lives and what they truly need. Once you’ve established the goals you want to help your workforce reach for, you can target different benefits to different employee groups. The best financial wellness programs include personalized assessments that allow employees to identify their specific financial goals and create tailored action plans to achieve them.

Prioritize Accessibility and Convenience

In today's digital age, accessibility of benefits is key. Opt for financial wellness services that offer mobile apps and online platforms that make it simple and convenient for employees to engage with the program whenever and wherever suits them best.

Ensure Seamless Integration

Integration of financial wellness tools with your existing HR and benefits platforms is crucial for a smooth implementation. Look for financial wellness solutions that can be effortlessly integrated into your company's infrastructure, minimizing disruption while maximizing worker participation.

Include Goal-Oriented Incentives

To motivate people and optimize employee engagement, consider solutions offering incentives or rewards for meeting specific financial milestones. These rewards might take the form of gift cards or bonuses, creating a win-win outcome for employees and the organization.

Track and Measure Progress

Evaluating the effectiveness of your financial wellness program is vital. Look for solutions that provide comprehensive reporting and analytics tools. These will allow you to assess the program's impact and make informed adjustments as needed.

Financial Wellness Programs for Employees: Future Outlook

By building a workforce that’s in solid financial shape, you’re not only contributing to your company's success. You’re also reflecting a commitment to the holistic well-being of your people, an investment with immeasurable returns in the long run.

Payactiv, a pioneer in EWA, works with thousands of companies to deliver its financial wellness solution to over a million employees, helping them manage day-to-day finances and bills without taking loans.

Payactiv’s solution integrates with major HCM providers and enables employees to access a portion of their earned wages when they earn them, rather than having to wait until payday or turn to a predatory lending service in times of need. Users also access free 1:1 financial coaching and savings and budgeting tools to help them reach their financial goals.

Research confirms a strong link between EWA, employee satisfaction, and higher retention rates.
   

Author Bio

Janet Sutherby is the Director of Human Resources at Payactiv.

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