Millennial small business owners
Both large and small employers believe they have a role to play in improving their employees’ mental, physical and financial wellbeing, according to a study by the Employee Benefit Research Institute (EBRI) focused on small businesses.
Previous studies have focused on the role of financial wellbeing benefits within the context of large employers and have revealed that large employers tend to use wellness benefits not only to improve their workers’ day-to-day finances but also to drive business outcomes, including higher retention, lower absenteeism, higher productivity and reduced medical or mental health claims. Less is known about the extent to which smaller firms – those with 100 or fewer workers – engage with financial wellbeing benefits, said EBRI.
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While a majority of employees in the United States (55%) work for a company that employs over 500 workers, the U.S. Census Bureau estimates that about 98% of businesses in the United States employ fewer than 100 workers, the report noted.
Overall, small and large employers appear aligned on the idea that they play a role in ensuring that their workers are well and have worked to help address day-to-day financial issues they face. Until recently, employers were primarily focused on addressing retirement preparedness, but recent increased inflation has prompted many to broaden their focus to helping employees deal with the high cost of living, financial-related stress and day-to-day living expenses.
However, nearly 3 in 10 small employers said costs are a challenge in offering financial wellness initiatives, and they are more likely than large employers to report that their financial wellbeing initiatives are fully paid by workers. This may have an adverse impact on enrollment, said EBRI.
Smaller employers are also less likely than large employers to offer health insurance, defined-contribution retirement plans, dental and vision benefits, and supplemental benefits.
A majority of both large and small employers believe their wellbeing efforts are helping improve worker physical, financial, emotional and social wellbeing. Smaller employers also viewed their financial wellness benefits as very effective in driving business goals, according to the study.
“Smaller businesses cannot leverage economies of scale and may also lack financial resources, as well as internal resources to research, analyze and make available benefits for their workers,” said Jake Spiegel, senior research associate, EBRI. “Still, small employers have a role to play in improving workers’ financial wellbeing.”
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
