Despite increased participation in 401 (k) plans, 85% of employers say they are not satisfied with employee savings rates, according to a study on retirement and financial wellbeing trends by Aon Hewitt. The study also found that 90% of employers are concerned about their employees’ understanding of how much they need to save in order to meet their retirement goals. Statistics like these explain why the Aon Hewitt study found 58% of employers offer tools to improve at least one element of financial wellness and that number is expected to grow to 84%.
Assisting employees to prepare for retirement is merely just one element in the financial wellness puzzle, which is why many of the 58% of companies offering financial wellness tools are not fully addressing the need. This is especially the case in organizations with diverse workforces. Most employees have multiple financial stressors and need specific tools for each. Planning for retirement and paying down student debt, albeit related, require different strategies and resources to manage. This is why 92% of companies are likely to focus on financial wellbeing beyond retirement by offering benefits to aid in managing student loan debt, day-to-day budgeting, and even physical and emotional wellbeing. Employers need to start acting now to address the problems their employees are facing while they are still manageable and before employees to choose to move to other companies that offer these benefits. As financial wellness moves to the mainstream, those employers that do not offer more than a 401 (k) will struggle to win the talent they need to succeed.
Manufacturing is not the only industry that is being impacted by automation. A separate Aon Hewitt report found that automatic 401 (k) features can be very effective in increasing plan participation. Features like these include automatic enrollment or contribution escalation tools.
For organizations looking to incorporate financial wellness into their benefits offering for the first time, there are a number of budget friendly options to choose from. For those employers with a 401 (k) plan, the plan administrator should have free financial wellness resources for their clients to use. There are also a number of advocacy groups and wellness vendors, including Wellable, that offer a free financial wellness seminar/webinar.