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Current Context

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May 24, 2023

Aspen Digital


According to Bank of America’s 12th annual Workplace Benefits Report, 97% of employers feel responsible for workers’ financial security (a trend that has more than doubled over the past decade, up from 41% in 2013). Many companies have invested in financial security resources and services to bolster workers’ financial wellbeing. This leads to a significant positive impact for low to moderate-income workers, who typically have the least amount of access to services such as 401(k) plans, employee stock ownership plans, and financial planning assistance.


In 2020, there were 6.3 million individuals classified as the “working poor” —U.S. Bureau of Labor Statistics

In 2020, there were 6.3 million individuals classified as the “working poor” (considered people who spent at least 27 weeks in the labor force but whose incomes still fell below the official poverty level) according to the Bureau of Labor Statistics. Additionally, not all Americans in the labor market have reliable employment or steady income, especially in the wake of the global COVID-19 pandemic and the end of pandemic-era financial assistance. Financial Health Network reported that the number of people considered financially healthy (using their own metrics based on an eight question survey) receded back to pre-pandemic levels, proving the government and employers can have a significant impact on the financial stability of workers. Employment instability can cause low- and medium-income households — whose income should bring them above the federal poverty level — to fall back into poverty at least one month a year, according to a 2017 study out of NYU. 

Looking more closely at the marginalized communities making up the tapestry of the workforce, the “median wealth gap between white and Black families has hardly changed over the last 20 years,” with the gap between white and Hispanic families only getting marginally smaller according to the U.S Department of Treasury. When looking at women’s financial security overall, Stanford found “controlling for educational background, women are largely lagging behind men in personal earnings,” with single women facing a higher risk of living in poverty. Women historically are assumed to be the main (and sometimes sole) caretaker of their family, and women make up 80% of single parents in the U.S according to the U.S Census Bureau and childcare costs on average, more than 35% of the median income for a single parent. A 2021 White House fact sheet points out that 4 in 10 women are the sole providers for their families and that this disproportionately impacts women of color. Black communities, in particular, often give more financial assistance to their own families in comparison to other racial groups, with Black women often carrying additional economic expectations.


4 in 10 women are the sole providers for their families, which disproportionately impacts women of color. —White House Briefing Room

Although many employers offer some form of support to promote worker financial security, low-income workers have very little room to accumulate savings for the myriad financial needs that come up in everyday life, let alone to realize the value of traditional employer-offered services such as 401ks, financial planning classes, and other long-term financial services that might be offered to them. They need immediate support. Some companies are leading the way with financial security support services for workers, but there is still more work needed.


Financial security is a complex and diverse issue that does not have a “one-size fits all” solution. However, it is clear that financial security starts with providing enough compensation to allow workers to afford basic expenses. Adequate pay is essential for workers to establish baseline stability before they can participate in additional services offered by employers such as 401k contributions, flexible spending accounts, savings programs, financial literacy programs, educational pursuits, and more. 

Another pivotal aspect of financial security is proper healthcare coverage. No worker can predict what will happen to their health or the health of family members, and medical expenses are the leading cause of personal bankruptcy for Americans. In the U.S. — where healthcare is intrinsically tied to employment — employers play an essential role in providing the workers with adequate healthcare coverage to guard against one of the most destabilizing risks in workers’ lives. Often workers in the gig, contract, or part-time space are not granted these employer-provided services and therefore have an increased overall financial instability.

Although healthcare coverage and fair pay remain a challenge for many workers, these issues are not the focus of our inquiry. We recognize the importance of addressing the structural forces shaping workers’ financial insecurity, but here we focus on the growing market of HR tech tools for financial security and what HR teams need to know today to do right by their workers. As we dig deeper into questions of worker financial security, we will explore how the additional services companies provide to workers support financial security today, and in Possible Intersections we explore the technology trends that are shaping those offerings and relationships for the years to come.


For Companies

Employer investments in worker financial security can drive productivity and also improve retention. Companies have long explored creative ways to both attract and retain workers. Although many articles have been written and jokes made about flashy employer perks like ping-pong tables, yoga rooms and happy hours, the services that directly impact their financial stability have the most meaningful and long-term impacts on a worker’s life. Mercer found that on average, people spend 13 hours per month at work worrying about personal finances. Using survey data from more than 3,000 workers, Mercer calculated that 5% of an organization’s payroll is “at risk from time unproductively spent worrying.” Meanwhile, the Work Institute estimated costs of worker turnover to range from 33% up to 200% of the departing employee’s salary for an organization. Worker financial insecurity costs employers money.


Estimated costs of worker turnover range from 33% up to 200% of the departing employee’s salary for an organization. —Work Institute

Conversely, if workers feel an organization is looking out for their financial wellbeing, then the workers are not only less likely to leave for other opportunities, but will also be more motivated to maintain high levels of productivity. This is especially important for organizations seeking to reap the benefits of a more diverse workforce because historically marginalized communities suffer disproportionately from financial insecurity. Both outcomes have positive impacts for the organizations’ bottom lines and general reputations as a desired workplace providing them with greater access to talent. 

For Workers

Financial insecurity is a widespread issue in the United States. Nearly 1 in 5 Americans were unable to add any money to savings in 2021, and more than half of adults are uncomfortable with their emergency savings. The struggle to build savings is most severe for Black households which face a significant number of systematic roadblocks to critical wealth-building opportunities like tax-advantaged forms of savings. Systemic racism and sexism haven’t just impacted the incomes of individual people of color — particularly women of color — but have also had a significant impact on general wealth. Given the impacts of employer-provided services, it comes as no surprise that people seeking employment actively choose to pursue roles with the organizations that are willing to invest in their workers and are able to provide the stability in the form of financial services and rewards that will help them grow their personal and generational wealth. 


Nearly 1 in 5 Americans were unable to add any money to savings in 2021 —MarketWatch

These programs are particularly important for workers on the low-mid-range of the pay scale, especially for part-time and gig workers. For example, part-time workers are more willing to remain long-term with a company that will provide tuition assistance like T-Mobile, where all workers are eligible to participate after 90 days of employment. Even just getting earlier access to the money they’ve already earned can be a big benefit to workers. Gig workers are more likely to stay loyal to organizations who are able to pay them quicker as only an estimated 15% of the over 50 million gig workers have cash on hand “for an emergency and… 29% [took] costly payday loans in the past year.” 

People want to be able to save for the future, for emergencies, and to be able to advance their lives through higher education and starting new businesses. Employer-provided financial services are vital to help workers get access to those opportunities and therefore are major motivators in not just picking jobs, but excelling at them as well.

Today’s Interventions

As discussed in the Motivations for Companies and Workers, when employers invest in their workers’ financial wellness, everyone benefits. Many employers now offer a variety of resources to help stabilize workers’ funds to help avoid short-term financial difficulties. Real-time pay, emergency savings options, and employer-sponsored loans or stipends are all options currently being explored for today’s financially-strapped workforce. 

Access to Pay

One of the factors that contributes to workers’ financial struggles is the delay — frequently at least one, if not two, weeks — between when they do work and when they get paid for that work. If bills are due before payment arrives, workers may be reliant on high interest loans, credit cards, or retirement savings to bridge the gap. Despite the speed of transfers in many other parts of life, most businesses are still using arrears (or delayed) payroll schedules, which reduce processing costs but cause lags for workers.


Additional financial solutions focus on saving smarter. While more financially secure workers may take advantage of workplace savings initiatives such as retirement funds or stock options, workers who live paycheck-to-paycheck are more concerned about their immediate needs.

The financial stress on workers brought about by both the pandemic and rising inflation, as well as employers’ need to attract workers in a competitive job market, is making rainy-day savings options a hot job perk.


Group Coordination

There are a variety of different strategies and tools available today to further cultivate worker financial security, from easier access to earnings to loans and funds to help prepare for and respond to emergencies. Although these employer-provided resources play an important role, there are still gaps in benefit systems and offerings and opportunities to improve and expand access. In the following portions of the Emerging Opportunity guide, we will explore emerging trends in technology with implications for the future of worker financial security services.


Morgan McMurray, Shanthi Bolla, & B Cavello

Read more of this Guide

Possible Intersections

Possible Intersections

How are tech trends driving change across all industries, and how may they show up in the worker financial security context?

Expert Insights

Expert Insights

HR decision-makers, labor advocates, social entrepreneurs, and experts in financial security share their perspectives.

HR Resource

HR Resource

How to navigate researching and implementing new services, with an eye toward improving the financial lives of workers.