The number of employees feeling “financially well” has dropped substantially in the last two years, even as employers feel more responsible for workers’ financial well-being, according to a recent study from Bank of America.
Bank of America’s 10th annual Workplace Benefits Report found that 49 percent of employees say they’re feeling “financially well” than 61 percent two years ago.
The report also found that 62 percent of employers “feel extremely responsible” for their employees’ financial welfare, up from 13 percent in 2013.
“And while employees have shown great strides in being better prepared to manage their finances and take necessary steps to improve their financial wellness, there are employees who may need additional support or guidance — especially women and younger generations. Employees are also looking for help not only with a wide range of short- and long-term financial goals, but also with ways to improve their overall wellness, including their mental and physical well-being.,” said head of retirement and personal wealth solutions for Bank of America, Lorna Sabbia.
Sabbia added that the COVID-19 pandemic has “has brought the idea of holistic wellness into sharper focus,” which is driving new workplace wellness programs.
Less than one-fourth of employees have been able to meet or make progress towards their financial goals, citing a “lack of disposable income after monthly expenses.” What’s more, women and younger employees are more likely to experience the feeling of being cash-strapped, the report found.
Today’s cohort of younger workers, from the Gen Z and Millennial generation, are the least at ease with finances, with 54 percent feeling short on cash. Meanwhile, Gen X employees and Baby Boomer and Silent Generation employees fare better, at 44 percent and 23 percent, respectively.
Debt management remains a top concern among workers, with 59 percent of employees indicating that they don’t have control of debt, and 36 percent reporting that debt has inhibited their financial progress. Approximately 50 percent of employees feel burdened by credit card debt, followed by mortgage and student debt 46 and 21 percent, respectively.
As financial confidence has dropped among employees, employer responsibility for employees’ financial health and financial wellness programs have increased.
According to the report, 80 percent of employers feel responsible for employees’ retirement health care plans, and 78 percent feel accountable for employees’ retirement income, up from 22 percent and 33 percent in 2012, respectively.
To foster individual financial welfare and responsibilities, companies have upped the number of financial wellness programs, focusing on saving for retirement, planning for healthcare costs, budgeting, saving for college and managing debt.
The survey, conducted by Escalent between Feb. 27 and March 27, sampled 996 full-time employees with a 401(k) plan and 808 employers who offer a 401(k) plan and have a full or shared responsibility for decision-making with the plan.
Bank of America shares (BAC) were last trading up 0.45 percent, or 10 cents, at $23.44.
