Bank of America Study Finds Employers’ Sense of Responsibility for Employees’ Financial Wellness Increased Significantly Over the Last Decade
62% of Employers Feel Extremely Responsible for the Financial Wellness of Their Employees, Up from 13% in 20131
CHARLOTTE, N.C.--(BUSINESS WIRE)-- Bank of America today announced findings from its 10th annual Workplace Benefits Report, which reveals 62% of employers feel “extremely” responsible for their employees’ financial wellness today, compared to 13% in 20131. This sense of increased responsibility by employers is even greater with respect to their employees’ retirement, with 80% feeling very or extremely responsible for helping employees prepare for retirement healthcare needs and costs, up from 22% in 2012;2 and 78% for preparing employees for retirement income needs, up from 33%.2
The range of topics being addressed by workplace financial wellness programs has increased significantly as well, with employees seeking support and resources across more of their financial lives. Compared with findings from the 2013 Workplace Benefits Report, these programs today focus on:
- Saving for retirement (81% vs. 70%)
- Planning for healthcare costs (71% vs. 38%)
- Budgeting (63% vs. 14%)
- Saving for college (55% vs. 13%)
- Managing debt (54% vs. 15%)
“Over the last decade, we’ve seen a significant increase in the range of financial wellness programs, which have become an integral part of employer benefits offerings,” said Lorna Sabbia, Head of Retirement and Personal Wealth Solutions for Bank of America. “While this growth is essential and encouraging, the pandemic has brought the topic of holistic well-being into sharper focus. Though the effects of these times have yet to be fully understood, employees are facing greater stress and demands on their time, straining their overall sense of wellness. More needs to be done to ensure employees feel supported at work – financially, physically, emotionally and mentally.”
The report examines trends in workplace financial benefits and wellness, tracking both employee and employer sentiment. Based on a nationwide survey of 996 employees and 808 employers, key findings include:
- Financial wellness and productivity are interconnected. 83% of employers believe employee financial wellness programs and tools help to create more productive, loyal, satisfied and engaged employees. This works both ways, as 57% of employees feel their well-being has a great impact on productivity. When asked what factors contribute to their overall sense of well-being, employees cited physical (51%) and mental wellness (54%) only slightly more so than financial (49%).
- Financial wellness has declined since 2018, and varies by generation. In March of this year, 49% of employees rated their financial wellness as good or excellent, down from 55% in 2019 and 61% in 2018. Fewer Gen Z (41%), Millennial (41%) and Gen X (38%) employees rate their financial wellness as good or excellent today, compared with 60% of Baby Boomers and the Silent Generation.
- Professional financial advice and holistic support remain top priorities. Fewer than four-in-10 employees say they have made significant progress toward specific personal financial goals. The top obstacle cited for not achieving their goals is a lack of disposable income after monthly expenses. Employees ranked advice from a financial professional as the top employer-offered resource, with whom they want to discuss a range of topics, and have flexibility in terms of how they access advice.
- Debt is a multifaceted challenge. 82% of employees have some type of debt, with the most common types being credit card (50%), mortgage (46%) and student loans (21%). Debt can erode a sense of overall well-being. Fifty-nine percent of employees say they do not have a high level of control over their debt, and 36% say it affects their ability to achieve financial goals.
Women need financial wellness programs tailored to their unique financial journey
The report found that 41% of women rate their financial wellness as good or excellent, compared to 58% of men. This – combined with the fact that women often make less than their male counterparts, are more likely to take time out of the workforce to raise a child or provide care for a family member, and typically live longer – underscores the need for financial wellness programs tailored to women’s unique financial journeys and life paths. The study revealed several differences between men and women, including on the topic of debt:
- Women are more likely to have credit card debt (56% vs. 43% of men) and student loans (30% vs. 11% of men), and are more likely to feel a lack of control over their debt (67% v. 49% men).
- Women are more than twice as likely to rank paying off credit card debt among their top financial goals (21% vs. 9% of men).
- Women are nearly twice as likely to cite lack of cash after monthly expenses as a primary challenge to achieving financial goals (47% vs. 27% of men).
“Women have inherently different financial journeys than men, creating a clear need for employers to target financial wellness solutions by both age and gender,” said Kevin Crain, Head of Workplace Solutions Integration for Bank of America. “At Bank of America, our goal is to work with employers to provide wellness programs that address the diverse needs of their workforce. These programs can be more critical today as the pandemic creates new challenges to maintaining financial wellness.”
Bank of America’s Retirement & Benefit Plan Services organization serves more than 30,000 companies of all sizes and nearly 6 million employees. Bank of America offers institutional client employees a range of financial benefit programs and solutions to help them pursue their financial future. Earlier this year, the company launched Financial Life Benefits, a comprehensive suite of workplace benefits and solutions bringing together traditional financial benefits – including retirement, health savings, equity compensation and non-qualified deferred compensation plans – with a corporate employee banking3 and investing4 offering that can help address employees’ everyday needs.
For more findings from the Bank of America 2020 Workplace Benefits Report, including action steps for employers, click here.
1 2013 Workplace Benefits Report 2 2012 Workplace Benefits Report 3 Bank products are available from Bank of America, N.A., and affiliated banks. 4 Investment products are available from Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Workplace Benefits Report Methodology Escalent surveyed a national sample of 996 employees who are working full time and participate in 401(k) plans, and 808 employers who offer both a 401(k) plan and have sole or shared responsibility for decisions made in the plan. Of employees surveyed, 48% were men and 52% were women, and they were represented across life stages such as Gen Z and Millennials (414), Gen Xers (229) and Baby Boomers & Silent Generation (353). The sample employer population included 401 Small companies (