To create financial wellness for employees, lead with inclusion

Over the past few years, I've had the pleasure of talking with hundreds of business owners—getting to know more about their growing businesses and also what's top of mind for them as employers. The topic that comes up again and again is financial security —  not just for their business, but for their employees, too. These business owners understand the mental and emotional relief for employees that comes with being financially secure. And they want to do more to help employees feel more secure.

Their comments align with the research coming out of the 2022 Global Financial Inclusion Index (Index).  The Index ranks the U.S. as the second most financially inclusive market, driven largely by the financial system and employers' support of individuals. Yet, employer support is far from consistent. Larger companies have an edge when it comes to offering benefits that increase their employees' financial security.

Employer Size
Employer support score
Provision of guidance and support

Employee pension/

retirement contributions

Employee insurance schemes
Employer pay initiatives
More than 1000 employees
501–1000 employees
101–500 employees
11–100 employees
2–10 employees

Table 1: Employer support scores in the U.S. by business size from the 2022 Global Financial Inclusion Index

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That's great for employees of those larger companies, but it also means there's an opportunity to help close the financial security gap for small and midsized businesses (SMBs). In 2022, more than half of full-time U.S. employees struggled to cover monthly living expenses. SMBs already play a critical role in helping employees feel more financially secure — but the research says they want to be champions of financial inclusion as well. And with SMBs making up 99.9% of businesses in the U.S., they're poised to make an even bigger difference.

Regardless of size, employers are a point of stability and security for their employees beyond wages — providing access to financial products and services from retirement and insurance to education and advice. These individuals often do not have access or the ability to purchase products on an individual basis, and because of that, many turn to their employer, a trusted source, to purchase savings and protection products. By creating a caring work environment rooted in financial education and trust, they can better support the long-term financial goals and future of their workforce — in turn increasing loyalty and productivity among their teams.

We are now faced with soaring inflation and economic uncertainty. At a time when businesses are going to need their workforce to be highly focused and engaged, reducing financial stress is a great relief that frees up employees mentally and emotionally.

Affordable and comprehensive financial products and services are the fundamentals of financial inclusion. Access to them requires a balance of support from three entities: governments, financial systems, and, critically, employers.

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While larger businesses scored consistently higher relative to smaller peers in the level of support offered to their employees, employers of all sizes, across every sector, can implement some immediate steps to enhance levels of financial inclusion across their workforce.

3 steps to make employee financial security more accessible

1. Boost opportunities for education. From our work with thousands of small and midsized businesses, we know the first step to driving meaningful change in employees' financial inclusion and security is education. And, according to Edelman's 2023 Trust Barometer, business remains the most trusted global institution, ahead of non-governmental organizations (NGOs), government, and media. This level of trust suggests employer-sponsored education programs can result in meaningful engagement and encourage employees to take full advantage of the benefits and resources available to them. 

Encouraging employees to commit time to meeting with a financial professional—and pointing them to resources to identify a trusted source—can be very empowering.

2. Offer income protection. Income protection can be the foundation of financial wellness and security, because it prevents a single emergency or unexpected event from derailing financial security. Income protection can come in several forms: paid family and medical leave (PFML), or employer-offered disability products such as short or long-term disability insurance. 

The pandemic highlighted the importance of income protection benefits as millions of Americans were faced with the challenges of caring for children or elderly parents. Paid family and medical leave and state disability insurance programs are a great foundation for employee's income protection. But it may not be enough for everyone. Employer-sponsored short-term disability insurance can work alongside public programs to serve as a personal safety net.

Ultimately, income protection benefits give employees peace of mind, reducing stress and increasing the ability to focus and execute.

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3. Review your benefits package. Just as customer needs change, so do the needs of employees. It's a good idea to review your benefit offerings yearly. Evaluate if what you're offering still makes sense for your workforce, and if there are any new offerings that might better meet a need they have.A thorough review of your holistic benefits package is critical to ensure offerings are well-targeted and cater to the specific needs of your workforce. More than half of workers in the U.S. feel it is an employer's responsibility to offer financial wellness programs, employer retirement plan contribution match or disability insurance.

Financial inclusion depends on support offered by financial systems, governments, and employers. This is a challenge and also an opportunity. Closing the gaps in employer support can help drive financially- inclusive futures for employees across the U.S.   

Financial inclusion and security for employees is the result of intentional action, ongoing dialogue, and adaptation over time — in turn increasing loyalty and productivity among their teams.

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Financial wellness Employee benefits Retirement