Employee financial wellness surveys find program participation had significant impact on employees’ abilities to cope with financial fallout from pandemic

It is no secret to anyone reading this that the financial fallout from the COVID-19 pandemic affected the majority of Americans and perhaps permanently changed the way we operate in our day-to-day personal and work lives. As we discussed in a student debt-focused blog post from earlier this year, the pandemic also highlighted the importance of financial-focused workplace benefits beyond just the defined contribution or defined benefit plan, including financial wellness programs.

According to our recent employee survey on financial wellness, which surveyed over 2,200 U.S. employees with access to benefits through their employer, this rising interest and availability in financial wellness programs is well founded. Those enrolled in financial wellness programs are generally in much better shape to deal with times of financial crisis and economic hardship than the average U.S. employee. If it wasn’t already obvious to U.S. retirement plan providers and employers, financial wellness programs—or, at least, the well-designed, impactful programs—are far more than just a buzzword or a box checker and have significant positive impacts on program participants. It would behoove all parties involved to jump onboard the financial wellness hype train now, before it leaves the station and leaves you with either dissatisfied customers or employees seeking work elsewhere.

Corporate Insight financial wellness employee and program participant surveys

In August of 2021, we fielded two large surveys focused on employee financial wellness and financial wellness programs:

  • Employee Financial Wellness Survey – Surveyed over 2,200 U.S. employees with access to workplace benefits through their employer on the following:
    • Availability, importance and participation in numerous workplace benefits, including financial wellness programs
    • Preferences related to educational content, financial news, advice, communications and digital engagement
    • Confidence in retirement savings and preparedness
    • Impact of the COVID-19 pandemic on financial wellbeing
  • Financial Wellness Program Participant Survey – Surveyed over 1,300 U.S. employees currently enrolled in a workplace financial wellness program the following:
    • Preferences, usage and satisfaction with financial wellness program features, digital platforms and the overall program
    • Importance of over 75 financial wellness program features, digital capabilities, educational topics and content mediums

The results of these surveys will serve as the backbone for much of the research and analysis provided by Workplace Finance Monitor.

The impact of the COVID-19 pandemic on personal financial wellbeing

It is stating the obvious to say that a pandemic that caused global shutdowns, killed millions and caused U.S. unemployment rates to skyrocket to levels not seen since World War II had a significant financial impact on U.S. employees. However, our survey data shows that while the financial ramifications of the pandemic are certainly far-reaching, it impacted certain segments of the workforce much more negatively than others. Among the entire survey population in our Employee Financial Wellness survey, 44% responded that the pandemic had a negative impact on financial wellbeing, compared to 22% that stated it had a positive impact. When you look at the generational splits however, it is evident that younger generations were hit notably harder.

This chart shows the pandemic's impact on financial wellbeing across generationsSpecifically, 55% of all Generation Z respondents reported that the pandemic had a negative impact on their financial wellbeing—25% higher than the full sample and 22% higher than Millennials. Further, that number drops progressively with each older generation, ending with only 39% of Baby Boomers reporting that the pandemic had a negative impact on their financial wellbeing, compared to 51% that stated the pandemic had little to no effect. One silver lining among the younger generations is that 29% of Millennials stated the pandemic had a positive impact on their financial wellbeing, which is the highest rate of any generation.

55% of all Generation Z respondents reported that the pandemic had a negative impact on financial wellbeing—25% higher than the full sample and 22% higher than Millennials.

The data about how the pandemic impacted the various generations goes beyond simple self-reporting of impact, and can also be seen in the savings behaviors of each generation. When asked how the pandemic impacted savings and retirement contributions, we saw similar results showing that younger generations were adversely affected more than their older counterparts. As the generations get older, the data trends positively across three significant behaviors: spending from personal savings, decreased retirement contributions and stopped retirement contributions. An overwhelming 87% of Gen Z respondents and 66% of Millennials had to either decrease or stop retirement contributions altogether as a result of the pandemic, compared to just 41% of Boomers and 48% of Gen X respondents.

This graph shows how the pandemic adversely affected the savings of younger generations relative to older

Fortunately, it isn’t all bad news, as our survey results also showed that financial wellness programs unequivocally have a positive impact on employees’ abilities to weather the financial fallout of the pandemic. In fact, 43% of financial wellness program participants reported that their financial well-being was positively impacted by the pandemic. This is far and away the highest percentage of any demographic from any crosstab in our survey, and nearly double the rate of all employees (22%) and over double the rate of individuals not enrolled in a financial wellness program (20%). Further, having an emergency savings fund—one of the first principles instilled by many financial wellness programs—also had a positive impact on employees’ ability to financially overcome the pandemic. Only 38% of individuals with an emergency savings fund reported negative impact to their financial well-being as a result of the pandemic, compared to 54% among individuals without an emergency savings fund.

43% of financial wellness program participants reported that their financial well-being was positively impacted by the pandemic.

While we certainly hope that we will never have to deal with a situation like the COVID-19 pandemic again in our lifetimes, it is inevitable that we will have to deal with multiple financial downturns. If there is one silver lining to be gleaned from these survey results on how the pandemic impacted financial wellbeing of U.S. employees, it is this: well-designed financial wellness programs work, and can have a strong positive impact on individuals’ abilities to prepare for the unexpected and weather the storm of an economic downturn.

To hear more about our recent financial wellness surveys, research and how to build an impactful financial wellness program, sign up for our upcoming webinar Financial Wellness Programs: Best Practices in Unprecedented Times.

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