The case for holistic financial wellness

As benefits managers look to expand their offerings beyond the basics, it might help to consider taking a holistic approach that includes the more nuanced — but equally as important — needs of their employees. This is important because employees are specifically looking for benefits that go beyond their retirement needs, and doing so can help build a confident, healthy, financially stable and loyal workforce.

Here are a few ways benefits managers can support their employees on their path to financial and overall wellness.

Employees have a lot on their minds today, from student loans and credit card debt, to purchasing a home, starting a family, sending their kids to college and saving for retirement. As a result, it can be hard for them to figure out the best place to put their hard-earned income. In fact, the average overall financial wellness score from a recent Bank of America survey was 50 out of a possible 100 points, with only 35% of women saying they have money left over at the end of the month.¹

Benefits teams that take today’s whirlwind of budgetary needs into consideration might be able to help bridge this financial wellness gap. They can do so by providing accessible resources like online budgeting tools, calculators, and financial literacy programs so that employees can start to take back ownership of their money and put concrete savings goals in place. “These resources might focus on practical skill development, such as budgeting, saving and debt management, which can help empower employees to improve their financial habits and overall wellbeing,” said Lorna Sabbia, head of Workplace Benefits at Bank of America.

Exploring less traditional benefits can also help address some of employees’ biggest concerns. “For example, a big stressor for employees today is debt, so debt assistance is emerging as an attractive benefit,” said Sabbia. According to Bank of America data, one in two employees carry mortgage or credit card debt, and one in four carry student debt.² “Employers are starting to explore ways they can support employees with debt, as 37% now offer student loan repayment assistance,” said Sabbia.

Offering one-on-one financial guidance may also significantly impact employee financial wellness by providing personalized support tailored to individual needs. “Personalized sessions can help employees develop actionable plans to address their specific financial challenges, build stronger financial habits and achieve their financial goals,” Sabbia added.

Although workplace support for employees’ wellbeing is improving (39% of employers say they already are addressing whole-body health and well-being in current workplace benefits, while 32% say they are considering this trend as part of their benefits strategy in the next one to two years),² there might be more that benefits managers can do to keep whole-body health and well-being at the forefront. Doing so not only improves the personal lives of workers, but can impact engagement, productivity, and job performance.

“Employee well-being is no longer a perk, but a strategic imperative,” said Sabbia. “Benefits managers might consider whole-body health and wellbeing to enhance employee engagement, boost productivity and control health care costs, ultimately contributing to stronger and more competitive organizations. Ignoring this trend could put companies at a disadvantage when looking for new talent.”

To stay ahead of the curve, benefits managers can consider programs that give employees the freedom and flexibility to take care of their individual health needs. For example, wellness reimbursements, such as Lifestyle Spending Accounts (LSAs), can help employees pay for a range of health and wellness expenses, such as gym memberships or meditation classes. “Our 2024 Workplace Benefits Report found nearly half of employers and employees are interested in LSAs, but only 29% of employers currently offer them,” said Sabbia. “Employers can consider these types of wellness reimbursements to potentially reduce health care costs and absenteeism.”

Research shows that a retired 65-year-old couple could need $351,000 in savings to cover their retirement health care expenses, yet only 7% of employees think their yearly health expenses in retirement could total $10,000 or more.² “Employees of all ages need to plan for future health care costs, especially considering that the cost of health care tends to outpace inflation,” said Sabbia. “Beginning to save for these costs now will put employees in a better position during retirement.”

To help, employers can emphasize the value of savings tools, like Health Savings Accounts (HSAs). “Promoting these tools through educational resources and enrollment assistance can empower employees to save tax-advantage dollars for future medical expenses, mitigating the financial burden of health care in retirement,” Sabbia added.

At its core, overall financial wellness is the ability to manage finances for both the short- and long-term. Employers who move beyond this and provide resources like digital tools, advisory support, and wellness reimbursement accounts can empower employees to bring their best selves to work and make better financial and overall wellness decisions in their daily lives.

¹ Participant Pulse Q3 2024

² 2024 Workplace Benefits Report