In 2014, the majority of American companies intend to help their employees improve their financial well-being, a factor that can increase workplace productivity.
An Aon Hewitt study reveals that as many as 76% of U.S. companies are somewhat or very likely to expand their focus on their staff’s financial health this year.
A separate Aon Hewitt survey shows that an individual’s financial situation is the most commonly cited stress factor, and 51% of polled workers say stress has reduced their productivity at work.
“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,” says Rob Austin, director of retirement research at Aon Hewitt.
Daily budgeting is one area in which companies plan to help their staff this year, according to the survey. A quarter of employers are very likely to provide some assistance in that field. “Employers understand that workers can’t adequately save for retirement if they don’t have their financial house in order,” explains Austin.
Firms are also planning to offer tools for improving employee decisions about saving and investing. Forty-four percent 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. Thirty-five percent of organizations offer access to third-party financial advisors via phone, and another 14% are somewhat or very likely to do so in the next 12 months. Twenty-three percent of employers offer face-to-face meetings with financial advisors, and another 10% are somewhat or very likely to add this feature in 2014.
Yet another form of assistance companies plan to offer is simplifying investment options. Most employers (79%) offer target-date funds (TDFs) in their DC plans. Of those that do not currently offer them, 36% are somewhat or very likely to add this feature in 2014. More than a third (39%) of companies offer managed accounts, with nearly 24% of the remaining group somewhat or very likely to offer them in the year ahead. Features such as TDFs and managed accounts help employees meet their retirement savings goals by making some of the investment decisions for them.
“To ensure that they’re making the most of their retirement savings, workers need to take an active role in managing their 401(k) through regular rebalancing and re-evaluation of fund choices,” explains Austin. “However, many employees feel they lack either the time or the understanding to make sound investing decisions.”
The survey polled more than 400 U.S. companies, representing nearly 10 million workers.
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