This brief draws on interviews with 10 employers to better understand employer-provided financial capability services targeted to low- and middle-income employees. These programs are designed to improve individuals’ economic outcomes, but few studies have examined the range, variability, successes, and challenges of offering such services to employees.

Overall, this study found the interviewed employers offered a range of financial capability services to nearly all their employees—either independently or in collaboration with external partners—that were designed to bolster employees’ financial well-being, support employee retention, and benefit the employer’s business operations. Many employers used surveys, program data, and anecdotes to determine whether services were meeting their goals and improving employee financial well-being, although none conducted impact evaluations of efficacy.

Why this matters

Financial capability services intend to improve individuals’ economic outcomes by building financial skills, knowledge, and self-efficacy, as well as expanding access to resources and opportunities to promote positive financial behaviors. While employers have been developing and offering financial capability services to employees, little research has captured the range, variability, successes, and challenges of offering such services to employees.

This study aims to address this knowledge gap by gathering information to better understand why and how employers offer financial capability services for employees, what they have learned from offering such services, and how they see the services as influencing employee well-being.

What we found

Through interviews with 10 employers who offer financial capability services to employees with low or moderate incomes, we find that:

• Employers offered a range of financial capability services to employees, with many of the offered services focusing on establishing and supporting employees’ financial stability, or ability to meet their basic needs, rather than building assets.
• While employers differed in their motivations for offering financial capability services, several common rationales emerged: (1) meeting a wider range of employees’ needs; (2) taking advantage of invitations from external organizations, such as nonprofits or banks and credit unions) to develop services; and (3) supporting employee retention and creating long-term relationships with employees.
• Some employers used external partnerships to offer financial capability services that were not possible to offer in-house. A few employers used complementary nonprofit organizations— nonprofit arms of employers dedicated specifically to providing emergency assistance to employees—to deliver services.
• Most employers offered financial capability services to their entire full-time staff because they believed all employees could benefit from them and often introduced employees to services as soon as they were hired.
• Although few employers conducted formal evaluations of their financial capability services, many tracked outcomes and collected information about employees’ experiences with the program through surveys, informal conversations, and program data to track program successes, including savings rates, credit scores, and satisfaction.
• In implementing financial capability services, employers reported that they had to use creative outreach strategies, such as emails and posters, to connect employees to financial capability services and actively worked to address challenges of employee turnover, high demand for services, and language barriers.

Employers’ experiences in the study suggest that they could offer financial capability services to employees to help them build financial skills, knowledge, and agency, and to facilitate employees’ access to resources to promote positive financial behaviors. Most employers described how although financial capability services take time, effort, and resources to administer, they ultimately felt that offering these services to staff supported the organization’s business operations.

Further, financial capability partners and practitioners can advance their goals of successful participant financial security by continuing to develop resources and partnerships with employers to deliver services directly to employees.

However, further research is needed to better understand how employer-offered financial capability services support employee financial well-being, including research on implementation challenges and solutions and the efficacy of such services on employees’ financial outcomes.

How we did it

We conducted semi-structured interviews with 10 employers in different industries, geographies, and organizations on the financial capability services they offered to their employees. These employers offered some type of financial capability services to their employees beyond 401k or other retirement benefits and had a portion of employees who earned low or moderate incomes, although not all employees must fit this description. We asked interviewees about the services they offered, how they administered such services, eligibility guidelines, motivations, and their perceptions of impact on their employee’s financial well-being.