Employee financial stress is pushing more companies to rethink their benefits strategy. And for good reason—nearly two-thirds of employers faced turnover rates of 10% or higher in 2024, with almost half experiencing rates above 15%.
A recent Gallagher report on retirement benefits, covered recently in Employee Benefit News, highlights how companies are expanding their offerings beyond traditional retirement plans to include more comprehensive financial support for workers. That includes one-on-one financial coaching, budgeting tools, and personalized guidance to help employees feel more in control of their money.
Frank Giampietro, chief well-being officer for EY Americas, who was quoted in the EBN article, says basic financial planning may be the most impactful benefit employers can offer. “’Many folks across all generations today feel out of control of their financial life,’” Mr. Giampietro explained. “’Helping them to assert control in that area has a huge impact on reducing burnout and helping people thrive.’”
The connection between financial stress and turnover is hard to ignore. Employees struggling with money worries are more likely to jump ship for even a modest pay increase. But when employers help workers achieve some financial stability, they build loyalty and a sense of appreciation that keeps people around longer.
Gen Z workers are particularly vulnerable. They have the highest turnover rates and are more anxious about their financial well-being than any other generation. Mr. Giampietro noted that over half of young workers entering the workforce worry about day-to-day finances and what the future holds. That stress translates to lost productivity and increased absenteeism—costs that add up quickly.
There’s no one-size-fits-all approach here. Each generation faces different financial challenges and has different goals. Plan sponsors and advisors should consider offering a range of programs that meet employees where they are and that acknowledge their diversity and individual financial concerns. Not everyone needs the same kind of support.
One benefit that remains underutilized: employer-sponsored financial advice programs. Some employees hesitate to use them, wondering whether their employer truly has their best interest in mind or whether it’s a safe space to share personal financial details. Mr. Giampietro encouraged benefit leaders to address these concerns head-on through education and communication. “’Folks are busy,’” he told Employee Benefit News. “’This is one of those things that they tend to know is important but still don’t prioritize.’”
For plan sponsors, the takeaway is straightforward. Financial wellness isn’t just a nice-to-have perk anymore—it’s table stakes for any competitive benefits package. Employers who help their workforce manage financial stress will likely benefit from stronger retention, improved productivity, and greater overall engagement.
