Employers may not have been so generous in recent years with regards to raises and bonuses, but they're increasingly sharing the wealth when it comes to offering financial advice as a benefit for employees.
Aon Hewitt, the human resources consulting firm, released data on Jan. 9 that shows a growing number of employers plan to do more to help their employees budget their finances and access financial advisers. According to the firm, 76 percent of the 400 U.S. companies surveyed are either somewhat or very likely to expand their "financial wellness" benefits in 2014, and a quarter said they planned to add day-to-day budgeting tools to help workers. Moreover, while 35 percent of employers already offer phone-based access to financial advisers, another 14 percent are either somewhat or very likely to add this feature in 2014.
Rob Austin, director of retirement research at Aon Hewitt, said the results were far higher than he'd expected. "What I didn’t necessarily think we’d see is three out of four companies saying they were going to focus on this. Two to three years ago, nobody was doing financial wellness outside of the 401(k)."
The expanded offerings may be an extra benefit for employees, but they are not a purely altruistic move on behalf of employers. Yes, they show how much the employee benefits landscape has reshaped itself in the five years since the financial crisis, when employers were slashing 401(k) matches and cutting employees' salaries. Yet the added "financial wellness" tools are intended to help offload employee stress, making for more productive workers. Separate research from Aon Hewitt found that an employee's financial situation was the most frequently cited reason for stress.
Such benefits are also intended to help employees save better so they can actually retire, making for a younger—and less costly—workforce.
"There are people who probably don't want to be working anymore yet can't afford to retire," Austin says. Employers, eager to make sure that doesn't happen with the next generation of employees, he says, are adding such tools so workers can procure the right kind of mortgage for their house and save appropriately for their kids to go to college. "You can see where this does lead to workforce planning," he says. "It correlates into the cost for medical [insurance], and general employee morale."
In addition, the new benefits come amid an embarrassing flap over a McDonald's budgeting tool that seemed to suggest employees take on a second job. As a result, employers are aware of the need to delicately navigate their desire to help employees with their finances while not looking paternalistic or insensitive.
One large retail client, Austin says, opted not to add a budgeting tool for employees after the McDonald's story broke. "They decided 'let’s put it on the back burner,' " he said. "They felt if they came out with something right away it might not be the appropriate time to do it." Austin notes that the use of third-party personal finance tools, such as HelloWallet, should help to get around some of those concerns. "It’s a little more outside the organization’s hands," and offers more consistency across different companies.
For now, Austin says companies that add such "financial wellness" tools are doing so on a purely voluntary basis. Unlike many wellness programs related to health insurance, they're not installing carrots or sticks—program discounts or financial penalties—for those employees who participate, say, in a smoking cessation program or weight loss program. "There's no inklings that this financial wellness benefit is going to move in that direction," Austin says. "But who knows, maybe in a few years it might mirror that."
Jena McGregor is a columnist for On Leadership.