COMP NEWS – Employers are quickly realizing that paychecks aren’t enough to retain talent. With inflation rising faster than salaries, employees are seeking benefits that ease their financial pain in more ways than just cash compensation.

With inflation outpacing salary gains, employers are feeling more responsible for employees’ financial wellness—97 percent of employers said so this year, up from 95 percent in 2021.

The finding is from a nationwide survey of employees and employers, with the results presented in Bank of America’s 2022 Navigating a New Era of Financial Wellness report.

The researchers drew on a recent survey of 834 full-time employees who participate in 401(k) plans and 846 employers that offer 401(k) plans and have sole or shared responsibility for decisions made in the plan.

The report found numerous key data points; including that employees seek out employers that provide benefits programs that alleviate financial stress and that equity is a strong recruitment and retention tool for top talent. The message is clear – employers that focus on relieving their employees’ financial pain are benefiting from increased retention.

Key findings from the report include the following:

• Employees want programs to alleviate financial strain. Eighty percent of employees are concerned about inflation, and 71 percent say the cost of living is outpacing growth in their salary or wages. Amid this financial stress, employees are seeking support from their organizations, with 82 percent saying employers should play a role in supporting their financial wellness.
• Financial wellness programs result in tangible benefits for employers and employees. Ninety-one percent see higher employee satisfaction when they offer tools and resources that help employees manage their financial well-being.
• Equity (company stock) grants are powerful recruitment and retention incentives. Seventy-six percent of employers believe equity compensation is a differentiator for recruitment, and 44 percent of employees who participate in equity compensation plans say it was an important reason for accepting the job.
• Health care education could be improved. Eighty-four percent of employers feel “very responsible” for their employees’ understanding of retirement health care needs and costs, and 89 percent of employers that offer health savings accounts (HSAs) contribute to their employees’ HSAs. Yet, only 54 percent of employers communicate about these topics at least once a year.

To read about how employers are addressing their employees’ financial pain, click here.

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