- Financial well-being remains top of mind. Seventy-eight percent of surveyed employees in a recent study said saving and planning tools would be valuable to them.
- Employees’ wish list is sizeable. A separate report found workers would most like employer-sponsored assistance with student loans, saving for retirement, saving for future education, debt management and improving their credit score.
- Consider the benefits of AI. Artificial intelligence may be leveraged to provide tools and solutions that are tailored to each employee’s specific circumstances.
Workers are increasingly looking to their employers to help improve their overall financial well-being and ensure they are on track for the future. According to Alight’s 2023 International Workforce and Well-Being Mindset study, 78% of surveyed employees said saving and planning tools would be valuable to them, while just over 60% said they would find value in personal financial one-on-one coaching or advice. Two-thirds (65%) stated they would be comfortable sharing their personal financial information in exchange for that guidance.
The economic turbulence of the last few years — increased inflation, high interest rates and personal debt (e.g., credit cards, and home, car and/or student loans), as well as rising healthcare costs — has many American workers struggling to keep their head above water. This scenario likely impacts individuals’ financial (and physical and emotional) health.
More employers, though, are recognizing workers’ struggles and stepping up to provide needed assistance toward their financial well-being. Over the last decade, broad financial well-being programs have become more of the norm in employer benefit packages. This trend is expected to continue, as Alight’s 2024 Hot Topics in Retirement and Financial Well-Being report found nearly 90% of surveyed employers are “very likely” (58%) or “moderately likely” (31%) to focus on financial well-being beyond the retirement plan in 2024.
That may be welcome news for employees, as 46% of surveyed workers in the 2023 well-being mindset study said their finances control their life. And, according to Alight’s 2023 Hot Topics in Employer Well-Being report, workers would most like employer-sponsored assistance with student loans (59%), saving for retirement (58%), saving for future education (54%), debt management (54%) and improving their credit score (34%).
Leverage AI to Deliver Tailored Support
As employers seek to develop differentiated program components (i.e., tools, resources and guidance), it’s critical to deliver them to a differentiated audience. After all, individual employees’ financial situations are, of course, unique.
Artificial intelligence (AI) may be leveraged to provide tools and solutions that are tailored to each employee’s specific circumstances. For example, an employer can utilize AI to analyze enrollment data and recognize that a worker is enrolled in both the HSA and 401(k) plans and then provide a tool that helps optimize contributions between the two savings vehicles.
AI-driven platforms can automate the enrollment process for 401(k) plans, making it easier for workers to sign up and start contributing. Such platforms may also track progress toward retirement goals, sending alerts and nudges to encourage increased savings or adjustments in investment allocations. This proactive approach can help employees stay on track with their retirement planning and increase the likelihood of better financial outcomes.
Furthermore, AI can streamline 401(k) plan management administrative tasks, such as compliance monitoring, reporting and transaction processing. This efficiency may reduce costs for employers and enable effective and accurate handling of workers’ retirement savings.
While AI offers some advantages, it is not without its challenges. Integrating AI into a 401(k) requires careful consideration of potential pitfalls and ongoing oversight. AI should complement, not replace, human financial advisors who can address the emotional and personal aspects of financial planning.
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