Eye on employee retention: The rise of financial well-being benefits

By Bryan Strickland

In response to employees considering greener pastures amid financial struggles, employers are increasingly offering voluntary benefits specifically aimed at addressing financial concerns.

Ninety-two percent of employees in an annual survey sought additional financial support resources from their employers. The majority (58%) said they're living paycheck-to-paycheck, with one in three saying they cannot afford a $500 unexpected expense.

Employers, with talent retention in the current job market of paramount importance, are responding in kind: 72% of the 698 U.S. employers in the 2024 Wellbeing and Voluntary Benefits Survey said they plan to address their employees' financial well-being in 2024.

"We're seeing that employees now expect their employer to offer even more support for their well-being, and this need underscores the importance of employer-sponsored benefit programs," said Tom Kelly, a principal in the Health and Benefits Practice at global insurance company Gallagher, co-author of the report with Gallagher subsidiary Buck. "A troublesome two in three employees would change their jobs for better benefits, and 46% of workers are actively considering a job change in 2024."

In the most recent quarterly Economic Outlook Survey by AICPA & CIMA, CPA decision-makers listed their companies' top challenges over the next 12 months as inflation, employee and benefit costs, and availability of skilled personnel.

In the voluntary benefits survey, employers were asked to name the top benefits they offer employees. The employers’ current top 10 — headed by supplemental life insurance/accidental death and dismemberment insurance — doesn't include any financially focused benefits.

However, a list of the fastest-growing benefits includes emergency savings services (No. 2) and financial coaching (No. 4) in the top four. The rest of the top four — long-term care (No. 1) and caregiving (No. 3) — tangentially address financial challenges. Student loan support (No. 10) also made the list.

"Among the top factors influencing employee job satisfaction and engagement are an employer's commitment to supporting well-being and a benefits package that meets their personal needs," said Ruth Hunt, a principal in Gallagher's Communications practice. "The data clearly shows that voluntary benefits can play a key role in workforce retention, especially in a market where big pay bumps are cooling. And organizations likely need to revisit their communication strategies to enhance employee education and increase use of benefits, to drive desired outcomes and results."

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.

SPONSORED REPORT

Be prepared for tax season early

Our expert tax report highlights the important issues that tax preparers and their clients need to address for the 2024 tax year. Stay informed and proactive with guidance on critical tax considerations before year-end.