Financial benefits emerge as a key differentiator for the workforce in the new year
As employers reexamine their benefits strategies at the start of another new year, employee financial wellness is taking center stage, with HR leaders recognizing that traditional, one-size-fits-all approaches to money matters do not meet the needs of an increasingly diverse workforce.
From student loan assistance to curated financial advice, companies are expanding their offerings to address the broad financial planning of their employees — and as with other sorts of benefits, personalization is key.
“Employees increasingly demand access to benefits that address their entire financial picture, not just their 401(k) or high-cost tools with low engagement,” said Katie Pfeifer, head of workplace solutions at financial planning service Cerity Partners. Instead, they value personalized packages that consider all aspects of their finances, from stock options and deferred compensation to cash flow management and retirement strategies.
Offering access to experienced financial advisors who can provide one-on-one advice that aligns with employees’ unique goals is quickly becoming a go-to benefit, according to people managers. That means HR teams may want to take a proactive approach by partnering with trusted financial providers to support employees during critical moments, such as benefit changes, retirement planning or career transitions like outplacement.
“By investing in relevant, personalized benefits, companies can attract and retain top talent while fostering a healthier, more engaged workforce,” Pfeifer said.
In fact, in a survey this year of 620 HR leaders by professional services network Grant Thornton, benefits packages were the single biggest reason people join a company, as well as the biggest factor in retention.
Student loan benefits: A game-changer
One of the most significant developments is the expansion of retirement plan matching to include student loan payments, made possible by the federal Secure 2.0 Act. The benefit is particularly timely, given that 45 million Americans carry student debt amounting to $1.74 trillion, with many prioritizing debt repayment over their retirement savings.
Laurel Taylor, founder and CEO of financial services firm Candidly, has seen the impact firsthand. At her company, employees participating in the student loan retirement match program in 2024 earned an average of $3,000 in additional retirement contributions. Those contributions could potentially grow to $87,000 at retirement after just five years.
Adding a student loan retirement match to a company’s retirement plan creates a more inclusive offering, bringing younger employees, women and people of color — groups that have been disproportionately impacted by student debt — off the sidelines and into retirement savings, Taylor explained.
“With the new year and change of administration, borrowers will likely have fewer avenues toward forgiveness, so enabling them to build financial health and wealth while managing their student loan payments will become more critical than ever,” she said.
Childcare: The financial equation
With an eye on employees’ overall well-being, including financial wellness, more companies will focus on benefits related to childcare, as the needs around it continue to put a fiscal and logistical strain on parents as well as employers.
“The reality is that childcare is expensive, and without corporate investments in these benefits, parents are strapped balancing work, care and finances — even forced to leave the workplace altogether,” said Shanelle Reese, chief people officer at Wonderschool, a childcare solutions provider.
In response to parents vocalizing the urgent need for childcare resources, HR leaders are putting more effort into better understanding how to meet employees’ needs around their families, Reese said.
That said, childcare is not a one-size-fits-all benefit. Some parents require after-school care, while others are seeking on-site care at the office or after-school care — and all of it requires great financial and logistical coordination. The key, workforce experts say, is first communicating with employees about their individual needs, enabling employers to design better benefits and employees to make more informed choices.
Employee views matter
When it comes to benefits from top to bottom, employee feedback is a critical tool for shaping employer offerings, with HR increasingly reliant on employee surveys, focus groups and exit interviews to design their benefits programs, according to Marchelle Johnson Wright, chief people officer at media company My Code.
Annual benefits surveys are becoming especially important, she said, “to ensure that perks and benefits effectively meet employee needs.”
There are several resources for designing the most effective employee questionnaires. For example, HR services provider Trinet has produced a guide for HR departments as they assemble their benefits surveys, including best practices and 21 questions to ask employees around topics ranging from health care preferences to PTO. Others are available from companies like survey platforms SurveyMonkey and Qualtrics and presentations design app Mentimeter.