Employers Focus on Helping Workers Manage Finances
LINCOLNSHIRE, Ill. -- As U.S. companies grow increasingly concerned about the financial well-being of their workforce, an Aon Hewitt survey finds that employers are looking for new ways to improve the long-term financial health of their employees. Fully 76% of companies surveyed are somewhat or very likely to expand their focus on the financial well-being of their employees this year.
"In the past, companies were primarily concerned about whether workers were participating in their 401(k) plans, but we're now seeing employers expand their focus beyond just retirement savings to help workers improve their overall financial health," said Rob Austin, director of retirement research at Aon Hewitt, a global provider of human resource products and services. "A growing number of companies are offering tools and services to help employees make smarter financial decisions, which can help improve employee engagement and productivity as workers focus less on financial stressors."
According to a separate Aon Hewitt survey, an individual's financial situation is the most commonly cited stress factor, and 51% of workers surveyed said that such stress caused them to be less productive at work. To help workers better manage their finances, Aon Hewitt's survey shows companies are planning to take the following steps:
- Providing help to manage budgets. A growing number of employers realize that basic money management plays a critical role in an individual's financial well-being. To ensure workers are able to pay for day-to-day living expenses, a quarter of employers are very likely to provide some assistance to employees to help with budgeting.
- Offering tools and resources to improve saving and investment decisions. More companies plan to offer access to advice, tools and resources that help employees examine their overall financial picture. Increasingly, these resources allow workers to consider a variety of factors including expected retirement date, all income sources -- not just their paycheck from their employer -- and other details of their personal financial situation.
Companies are providing these types of advisory services through a variety of channels:
- 44% of employers currently provide access to online third-party investment advisory services and another 14% are somewhat or very likely to offer them in 2014.
- 35% provide access to third-party financial advisers via phone and another 14% are somewhat or very likely to do so in the next 12 months.
- 23% offer face-to-face meetings with financial advisers and another 10% are somewhat or very likely to add this feature in 2014.
Employers continue to offer options to provide workers with a simple and straightforward approach to investing. Most employers, 79%, offer target-date funds in their defined contribution plans as a turn-key approach to saving. Of those that do not offer them, 36% are somewhat or very likely to add this feature this year. And 39% offer managed accounts, with 24% of the remaining group somewhat or very likely to offer them in the year ahead.
Published by The Business Journal, Youngstown, Ohio.
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