Your Workers Are Experiencing Financial Stress: An Emerging Benefits Trend Can Support Your Team (and Your Company)

Supporting Financial Wellness in Today’s Workforce

Financial wellness programs are increasingly sought-after employee benefits and are the highlight of this year’s National Employee Benefits Day. Employers may consider April 6 as an opportunity to assess how effective their benefits packages are, in light of increasing demands for more adaptable and personalized options from a workforce that is changing quickly and facing financial strain. Here’s how financial wellness advantages can support your employees – and your company. 

National Employee Benefits Day 2025: Emphasizing Financial Wellness Initiatives 

National Employee Benefits Day, occurring on April 6 this year, was created by the International Foundation of Employee Benefits Plans (IFEBP) – an educational group that supports plan sponsors and employee benefits sectors in both the U.S. and Canada. The day is acknowledged by employers, HR experts, benefits managers, insurance companies, and various industry specialists – and this year the IFEBP is urging employers to prioritize the financial well-being of their workforce. 

• Financial wellness and planning advantages encompass “any advantage that offers insight or assistance in financial matters, including retirement savings or budgeting guidance: As stated in this article by the U.S. Chamber of Commerce.” It lists nine advantages – such as retirement plans, financial guidance and coaching, access to emergency funds, student loan support, disability and life insurance, education expenses, work-related stipends and reimbursements, personal financial help, and flexible paydays – as key examples. 

• The IFEBP urges employers to assess if they should modify their financial wellness initiatives to more effectively support their existing workforce: Numerous employers and plan sponsors prioritize employee financial well-being, but it could be time to reevaluate these programs to guarantee they meet new needs. What functions might AI and various new technologies serve in financial education? How can programs be structured to meet the specific requirements of low-wage workers or employee caregivers? 

An Overview of the Current Multigenerational Workforce and Economic Landscape 

Data from the U.S. Department of Labor shows that in 2023, Gen Z overtook Baby Boomers in the workforce for the first time. As of mid-2024, the workforce by age groups included: 

• 15% of the Baby Boomer generation 
• 18% of Generation Z 
• 31% Generation X 
• 36% of Millennials 

Hartford’s 2024 Future of Benefits Report identified this diverse age range as a crucial element that employers must take into account when creating a comprehensive and appealing benefits package for their workforce. “Building upon these generational challenges is a difficult macroeconomic landscape, characterized by increasing living expenses, which has led many workers in the U.S. to experience financial strain,” the report states. “This has created a demand for more tailored benefits – and education related to benefits – to enhance financial security.” 

Research Reveals Financial Strain Is Affecting Employee Performance 

Hartford’s report (linked above) features findings from a 2024 survey conducted with over 1,200 U.S. employees across approximately 500 companies. The findings indicate that: 

• 31% of all employees reported that their financial well-being consistently or almost consistently affects their productivity at work in a negative way. 

• About 50% of Gen Z and close to 40% of Millennials replied in this manner. 

The proportion of the two previous generations that also felt this way was quite notable – 24% of Gen X and 18% of Baby Boomers. 

How Employers Can Assist: Factors to Consider and Steps to Begin 

No matter the duration of the ongoing economic uncertainty or the effects it may cause, financial wellness benefits continue to be an essential component of any attractive benefits package for the modern workforce. If you want to enhance your employees’ financial well-being – and their work output – here are several crucial aspects you should take into account to begin. 

How does your organization compare? 

As per this SHRM report, which presents findings from a 2024 survey of over 4,000 professional members based in the U.S.: 

• 94% of employers provide standard 401(k) plans or comparable defined contribution programs. 
• 84% of these employers provide a 401(k) match, with an average employer match of 6.61% for traditional contributions and 6.50% for Roth contributions; and 
• 73% of these employers provide a Roth option – an increase of two percentage points since 2023 and a rise of 10 percentage points since 2020. 

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Are you Familiar with the Latest Plan Requirements and Choices Under the SECURE 2.0 Act? 

The SECURE 2.0 Act, enacted by President Biden in 2022, offers greater flexibility to employer-sponsored qualified retirement plans by allowing new options like emergency distributions, emergency savings accounts, and matching contributions for student loan repayments. These optional plan features may be especially beneficial for employees this year because of the uncertainties surrounding the economy and federal student loan programs. 

Do your Employees Know how to Engage with and Gain Advantages from your Retirement Plan? 

By enhancing your initiatives to inform employees about the retirement benefits available, you may boost the number of eligible participants in your plan and their contribution levels – thereby improving financial wellness for employees through the benefits already provided. 

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Do you Provide Employees with any Financial Advice Benefits that aren’t Related to Retirement? 

The SHRM report identified non retirement financial advice as a key “benefit to watch,” highlighting a modest increase last year in the provision of non retirement financial advice benefits (32%) and credit counseling services (16%). 

These advantages may encompass financial education offered via an employee assistance program, artificial intelligence resources (and, ultimately, AI agents), along with face-to-face classes and coaching provided by finance experts. Numerous new tools can be customized to meet the specific requirements of your employees, no matter their income levels and other distinguishing characteristics. 

To offer advice, support, and news regarding employee benefits and various workplace legal issues, so ensure you are subscribed to Fisher Phillips’ Insight System to receive the latest updates straight to your inbox. If you have inquiries, don’t hesitate to contact your Fisher Phillips lawyer, the writer of this Insight, or any attorney in our Employee Benefits and Tax Practice Group.