Appreciated this article for what it said, and for what it didn't say. It's primary thrust is that financial health of workers needs to be a workplace priority. Hear, hear! That workers need to understand their benefits and employers need to be thinking about strategies and approaches that help improve financial behaviors. Hear, hear again! However, this article does not squarely address many of the billion pound elephants in the room. For instance, wages have been stagnant for the majority of workers over the last 50 years. At the same time cost for benefits such as healthcare have skyrocketed and more and more of the financial burden is put onto workers to pay for those benefits. And this is not a small scale challenge. Some estimates show that 51% of employees at Russell 1000 companies don't make a living wage (shout out JUST Capital). We also saw recent analysis from Pew and others highlighting that many Americans are not on track for a secure retirement, in part because of our transition away from DB plans (again, putting more onus on workers to save in the face of insufficient wages and rising costs of living essentials - more on this below). The last 40+ years has also ushered in an era of rising housing, transportation, child care and other essential living costs, that outpace wage growth (Oren Cass and American Compass have done compelling work in this area). And while this last traunch isn't something employers have historically thought about, it is front and center in their workers lives and is showing up in the workplace. We are seeing progress. Twenty two states increased their minimum wage in 2024. As inflation continues to cool, real wage growth is up (hurrah!). As unions have continued their comeback, many non-union employers are making significant investments in wages and benefits. All positive trends for workers - and I'd argue employers too - in the face of decades of sluggishness. Financial health benefits continue to be a big priority for workers and their employers. But a financial health program that doesn't account for the material needs of its workers, that doesn't understand how overall benefits impact workers finances (e.g., looking beyond market based benchmarks) are unlikely to see the needle move, at scale, within their workplace. Finally, we are seeing some truly innovative approaches to addressing the financial health challenges of workers. From broad based employee ownership models (shout out to Ownership Works), to growth in emergency savings accounts, to focusing on new total reward benchmarks that focus on impact and outcomes for workers rather than what is needed to get workers in the door. In short, 2024 has the potential to be a big year for workplace financial health! And I'm here for all of it! #finhealth #financialwellness #employeebenefits #hrleaders #data #impact #innovation
Mat Despard
9mo
Great analysis, Matt. I appreciate our Ownership Works shout out - model for disrupting the usual capital/labor relationships in companies.
Payroll-deducted employer-rewarded Emergency Savings as a Benefit. If employees are using the 401(k) as an Emergency Savings Account, it's time for a real ESA |🎨Artist |🏑Coach | 🐞Lover | IVF Mama of 3 | 🎤Speaker |
9moPreach it, friend! Glad this article is getting some sunlight but hoping your points make some much needed ripples in the water too. There were some newsletter that came out this week highlighting these same points… 😜