Schwab 401(k) Study: Employers Step Up to Help Workers Manage Financial Stress

The financial well-being of employees has always been a concern for employers, but recent economic conditions have heightened this focus. A new study by Charles Schwab, the 2024 401(k) Participant Study, reveals that employers are increasingly taking action to help their workers manage financial stress. This article explores the findings of the study and the impact of employer actions on employee financial health.

The study found that 64% of workers believe their employers have taken action to help them manage financial stress, a significant increase from 52% in the previous year. The most common actions included increased pay (39%), flexible work arrangements (19%), and increased 401(k) match (18%). These initiatives demonstrate employers' commitment to supporting their employees' financial well-being.

These employer actions have had a positive impact on employee financial health. More workers reported feeling very good about their financial health (24%) compared to last year (20%), and a higher percentage of Gen Z and Millennials reported improvements in their financial health. However, about half of workers still reported that their financial health had not changed, and one in five said it had worsened.

Flexible work arrangements remain a priority for employees, with 84% considering them important and 57% willing to forgo a percentage of a salary increase for more autonomy over when and where they work. This trend is particularly strong among Gen Z and Millennials, who are more likely to prioritize flexibility over a salary raise.

The potential of the SECURE 2.0 Act has also gained attention among workers. Nearly one in three (32%) would like help understanding how new regulatory and legislative changes, like the SECURE 2.0 Act, affect their retirement plans. The most pronounced interest is in the federal government's plan to make matching contributions to workers' retirement accounts based on income.

Employers investing in employee financial well-being can lead to long-term benefits, such as improved productivity, reduced turnover, and increased job satisfaction. By offering financial wellness resources, employers can help their employees better understand and manage their finances, ultimately leading to a more financially stable and engaged workforce.

In conclusion, the Schwab 401(k) Study highlights the growing importance of employer actions in supporting employee financial health. By implementing initiatives such as increased pay, flexible work arrangements, and financial wellness resources, employers can help their workers manage financial stress and improve their overall well-being. As the economic climate continues to evolve, employers will play a crucial role in fostering a financially healthy and productive workforce.