The Future of Work: Why Financial Wellness is The Next Frontier in Employee Benefits

In 2023, stress caused by financial worries isn't just a problem for workers: it's a problem for employers too. That's according to eye-opening new research conducted by YouGov on behalf of YuLife.

The survey, conducted on 24th and 25th January, revealed that a majority of US working adults (70%) believe that stress around financial wellbeing can have a negative impact on performance in the workplace. Just 8% of the respondents disagree with this statement. 

More generally, 32% of US working adults believe financial stress is impacting their mental and physical health, although there was also a clear age divide around this issue, with younger people reporting more impact. 

In total, 42% of those 18- to 24-year-olds and 37% of 25- to 34-year-olds say that financial stress impacts their mental and physical health. In contrast, only 22% of those aged 55+ believe this to be the case.

Influence on recruitment

So is this something employers should be proactively helping to solve? Well, employees certainly seem to feel that way. 

Almost half (45%) of US working adults say that it's a workplace's responsibility to improve their sense of financial wellbeing beyond paying a salary, with this jumping to two-thirds (66%) among 18- to 24-year-olds. (In contrast, only 29% of those aged 55+ agree with this statement.)

Importantly, this is not just a vague sentiment, but one that's leading workers to vote with their feet. And this trend is crucial for any employer that wants to recruit and retain the best people to understand. 

Specifically, the survey showed that two-thirds US working adults (66%) believe a company's ability to support their financial wellbeing influences the likelihood of applying for a job there. This number jumps to almost three-quarters (73%) among those aged 18-24. Only 8% disagree with this statement.

Most employees, however, aren't seen as meeting these responsibilities. The YouGov/YuLife survey showed that a mere 13% of US working adults say their workplace has a comprehensive set of financial wellbeing policies and initiatives, while 23% say their workplace has no financial wellbeing policies in place at all. 

Even when employers do offer support, it's often poorly communicated. In the survey, almost one-quarter of employees (24%) say their workplace does not clearly explain the financial support it can offer them. And 16% of US working adults simply don't know if their workplace has financial wellbeing policies in place. 

Popular policies

So what kind of support is being provided by employers? When asked which policies/initiatives are in place to improve financial wellbeing, 70% of US working adults whose workplace has financial wellbeing policies say that their workplace provides health insurance, while 50% say that their workplace provides life insurance.

Only 37% of those surveyed say that their workplace offers critical illness (income protection).

Unsurprisingly, in these times of economic uncertainty, there's clearly a demand for such support. The survey revealed that more than half (55%) of US working adults are worried about their financial wellbeing, with the number jumping to almost two-thirds (63%) among women and those aged 18-24. Only 10% are not worried at all. 

When asked which workplace benefits would most enhance their sense of financial wellbeing, 28% of US working adults say income protection, and a further 28% say health insurance. The number choosing income protection jumps to 39% for 18- to 24-year-olds. 

Pressing concerns

All of which makes sense, given the current economic headwinds, and the way they're affecting employees in their day-to-day lives. And let's be clear: employees are very much being affected. 

When asked to select which financial concerns are most pressing, 66% of US working adults said the cost of living, which jumped to 72% among those nearing retirement (aged 55+).

But if all of this is news to employers, then it's perhaps not surprising. Because the survey also showed that most employees are unwilling to bring such issues to their attention. 

Specifically, more than half (53%) of US working adults say they'd be uncomfortable telling their employer that they feel financial stress, with 67% of those aged 55+ feeling the same way. Only 14% of US working adults would feel comfortable discussing their financial stress with their employer.

Conclusions

The conclusions employers should draw from this research are clear. At a time of global economic uncertainty, worries about financial wellness are real and affecting people's mental and physical health, which has an understandable impact on their performance at work. 

Employers who can provide practical help in this area, by providing employee benefits such as Income Protection and health insurance, will be first in line when it comes to recruiting and retaining the best people. And they'll also boost performance and morale throughout their workforce along the way, leading to greater productivity overall.