Employers have long supported employee financial wellness in a variety of ways in the workplace. However, in light of the COVID-19 pandemic, employers and their employees are facing new, unforeseen obstacles, including immense financial pressures. One national Prosperity Now survey  of more than 2,200 households showed that in the months of June and July 2020, nearly 40% of lower-income households felt worse off financially as a result of the pandemic, and almost half of the households surveyed were unable to fully cover at least one basic expense, such as housing, food or medical care, because of COVID-19. 

Last summer, to explore employee financial well-being since the beginning of the COVID-19 pandemic, Prosperity Now and the Consumer Financial Protection Bureau (CFPB) convened small group discussions with employers and experts around this important issue. Nine national employers, as well as five national associations and service providers, joined the three virtual roundtables that took place in July and August. We met with these leaders and experts in workplace financial wellness to understand the state of workplace financial wellness needs and services and generate strategies for building long-term employee financial resiliency ahead of any future crisis.

So, what did we hear? We all know that before the pandemic, workers struggled with a lack of emergency savings; challenges with budgeting and day-to-day management; and saving for long-term goals like education and retirement. During the pandemic, these challenges, as well as others like childcare and elder care; health care; and stress over the future, have been amplified. Large employers, especially, are trying to identify the right suite of financial wellness offerings that are appropriate for a diverse workforce at different income levels, all with a variety of needs. As we continue through this crisis, the focus is on short-term needs for many employers. But looking ahead, employers see many opportunities for enhancing financial well-being in the workplace.

Focus on Short-Term Needs

Employers were aware that households were facing immediate needs. Even before the pandemic, the Prosperity Now Scorecard shows that 37% of U.S. households—more than 45 million in all—are liquid asset poor, meaning that they lack sufficient savings to get by at the federal poverty level for three months. Even with the provision in the Coronavirus Aid, Relief and Economic Security (CARES) Act that temporarily eliminates the 10% early withdrawal penalty if you are under the age of 59½,  the employers we spoke to are generally not seeing heavy outflows from retirement accounts. Still, it is clear that many workers are feeling that their rainy day is now. We found that many employers have rushed to provide short-term help, including one-time payments or wage increases, help with childcare and elder care, resource groups and webinars. Employers are also looking to help their workers build emergency savings through options like workplace emergency savings accounts.

The Promising Future of Financial Well-Being in the Workplace

Employers and service providers are optimistic about the future of financial well-being in the workplace. The current crisis is helping to make a stronger case and pushing employers to give a “green light” for these benefits. With many working from within their homes, employers are literally seeing their workers’ lives more holistically—physically, mentally and financially together. Those we spoke with acknowledged that financial wellness is a key piece of overall employee wellness. A number of promising approaches are emerging, such as platforms for emergency savings and programs that consider the worker’s full family and community.

As the pandemic continues, our workplace will continue changing with it. Giving workers, especially low- and moderate-income workers and workers of color, workplace supports around their financial well-being will become more and more important.  This crisis has confirmed what we know and revealed so much for us to do to build financial wellness moving forward. Employers play a critical role, and we look forward to continuing to engage employers, policymakers and regulators, and nonprofits to explore how we can work together to make financial security attainable for all.