Optimizing Financial Wellness in a Diverse Workforce
Information extracted from the Financial Wellness 2019 Year in Review
The financial health of the average American worker has remained steady, but when you take a closer look to compare the health across different demographics you see variation. One in five workers has an unmanageable level of financial stress, with this stress increasing among minority populations.
Retirement Planning Remains a Top Concern
Retirement planning remains the top concern for Caucasian and Asian American employees, but for African American and Hispanic employees getting out of debt and managing cash flow remain first and second, respectively. For African American employees, interest in retirement planning fell three percentage points—from 48 percent to 45 percent—making it nearly on par with interest in buying a home (43 percent).
Interest in buying a home increased for Hispanic employees, from 35 percent to 37 percent. The good news is that Hispanic employees are showing improvement in financial behavior directly related to home buying. Specifically, the percentage that are saving (or have saved) for a down payment rose from 56 percent to 59 percent, and the percentage that have a credit score above 720 rose from 19 percent to 23 percent. Reductions in retirement plan loans and student debt may be helping Hispanic employees prepare for a future home purchase.
Another bright spot is the increase in participation in health savings accounts (HSA). Participation rates grew three percentage points for all groups except Caucasian, which increased five percentage points. Asian Americans remain the most likely to contribute to an HSA. Given the general lack of emergency savings among many American workers, the increased use of high-deductible health plans, and the triple-tax benefits of HSAs, we hope this trend continues.
Areas for Concern
While more focus may be placed on near-term issues like debt management and home buying, it may be at the expense of long-term issues like risk management. All groups reported lower percentages performing annual insurance reviews, maintaining adequate life insurance, or having long-term disability (LTD), but Hispanic employees reported the lowest percentages in all three.
Financial Stress Increases Most for Minority Groups
In 2019, financial stress rose across the board, most notably among African American and Hispanic employees. Both groups cited lack of control over their current financial situation and concern about meeting future financial goals as a primary source of financial stress. Employers with high minority populations should provide financial wellness benefits that aim to improve cash flow and debt management.
For More Information
Educating your employees and making a commitment to their overall financial wellbeing is incredibly important to help them achieve their financial goals – today and in the future. Incorporating a financial wellness program into your benefits offering can help assist employees with creating savings, reducing and eliminating debt, relieving financial stress, preparing for retirement and more. If you are interested in learning more about financial wellness, you can contact one of our specialists here.
The information and statistics included in this article were extracted from the Financial Wellness 2019 Year in Review report which is based on the analysis of 271,776 financial wellness assessments completed by American employees within the last nine years.
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. (NYSE Listed: CBZ) market investment advisory, investment management, third party administration, actuarial and other retirement plan services. Investment advisory and investment management services offered through CBIZ Investment Advisory Services, LLC, SEC Registered Investment Adviser. Investments, investment advisory and investment management services may also be offered through CBIZ Financial Solutions, Inc., Member FINRA, SIPC and SEC Registered Investment Adviser, dba CBIZ Retirement Plan Advisory Services. Third party administration, actuarial and other consulting services offered through CBIZ Benefits & Insurance Services, Inc.