This Research Minute is the fifth and final part in a series related to financial wellness.

Background: Earlier this year, the RRC fielded an in-depth employee survey with 2,500 respondents, which assessed financial wellness and related topics. An additional brief employer survey was deployed in mid-2023 to understand financial program offerings and employer perspectives related to employee support.

As highlighted in a previous Research Minute, most employers believe that they should play a fundamental role in supporting their employees’ financial wellness. In last week’s Research Minute, we learned that availability, access and utilization of employer sponsored financial wellness programs varies by generation.

Findings: This week, we examine the challenges inhibiting employee engagement with these offerings. Employees of all generations expressed a desire for financial privacy, with consistent percentages across the surveyed groups. Overall, employees of all generations ranked "I don't believe the benefit would be useful for my situation" as the least significant barrier.

The top barrier for Gen Xers and Boomers was the same, a desire for financial privacy. By comparison, Millennials report that the biggest barrier is hidden costs while Gen Z respondents highlighted feeling overwhelmed, stressed, busy and also share concerns around hidden costs.

Men show a higher likelihood of already having a financial advisor (23% vs. 15%) and expressing that they don't require financial assistance (22% vs. 14%) compared to women.

We also surveyed employers to better understand their perspectives around engagement barriers. Plan sponsors indicated they believe the main factors impacting usage include lack of time (25%), lack of understanding (24%), and lack of awareness (19%). Other factors such as the lack of financial incentives, data privacy concerns and lack of integration into benefits offering followed behind at lower percentage rates.

Bottom Line: Interest in employer-sponsored financial wellness programs is rising due to increased employee needs, and there has been a corresponding market response offering tailored products and solutions. Employee engagement and usage of financial wellness tools are certain to be a topic of discussion for years to come. To overcome barriers, plan sponsors and industry stakeholders will have to design and test various strategies and become creative in considering how to service a diverse workforce with expansive needs. For example, to overcome obstacles around data privacy and/or hidden costs, plan sponsors can employ targeted communications that address these concerns with transparency. These communications can be shared either via digital channels or through peer groups such as ERGs, BRGs, and/or employee champions.

In summary, this series on financial wellness explores how accessibility, engagement, and preferences intersect with short-term and long-term financial resilience. It provides a roadmap for individuals and organizations to navigate program complexities, supporting lasting financial health. The Retirement Research Center will continue to monitor trends in the financial wellness space and share new findings in future editions of the Research Minute.