In MassMutual’s 2019 Workplace Financial Wellness Study, survey data gathered by Greenwald & Associates reported that a large majority of employers believe their employees are struggling financially in saving for retirement, settling debt, and dealing with medical costs.
As part of a 2-phase study, the study’s approximately 15-minute online survey served as the second phase of research following a series of 1-on-1 interviews with plan sponsors and plan advisors. Researchers sought to learn more on how employers perceive financial wellness issues in the workplace:
- A total of 863 plan sponsors with retirement plan assets between $1 million and $75 million were included
- All participants were recruited through OpinionRoute’s online panel of B2B respondents, and required some decision-making responsibility for either their retirement plan or financial wellness program
- Online interviewing occurred from August 21, 2019 to September 3, 2019
In the survey findings, nearly 8 in 10 (79%) plan sponsors believe their employees are struggling financially, with larger employers ($25 MM < $75 MM; n = 223) showing to be 13% more likely to express concern about employee financial issues compared to employers with the smallest asset level ($1 MM < $5 MM; n = 250) (large employer by asset level = 89%; small employer by asset level = 76%). Among employers, 51% of those reporting concern estimate that at least 25% or more of their workers struggle financially, with 15% of employers estimating that upwards of 50% of employees are experiencing financial difficulties.
Ken Verzella, MBA, Head of Financial Wellness Strategist Group for MassMutual, highlighted that as long as workers struggle to overcome shorter-term financial issues such as debt and building emergency funds, they will be unable to save effectively for retirement and other long-term financial needs. “Our research finds that financial wellness issues are coming to roost at the workplace and that employers are acutely aware of their employees’ financial struggles,” said Verzella.
Currently, most employers (53%) believe that employees are struggling financially from hearing them talk about it, with 46% delineating risk from retirement plan participation and from those who have second jobs. The most prevalent issues cited by employers according to total concern were financial readiness for retirement (67%), ability to pay future medical expenses (64%), and participation in an employee’s retirement plan (62%). Lesser concerns included consumer (43%) and student loan debt (35%).
As more than half (57%) of plan sponsors believe employees look to their employers for support to manage their finances, increased intervention can assist in tackling financial woes. “MassMutual is hearing from employers that sponsor retirement plans that employees not only need help but want assistance from their employer,” said Verzella.