United States Financial Wellness Benefits Market Outlook Report 2023-2028: Investing in Employee Well-Being - Early Wage Access Gains Ground as a Solution

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Aug 22, 2023, 20:15 ET

DUBLIN, Aug. 22, 2023 /PRNewswire/ -- The "U.S. Financial Wellness Benefits Market - Industry Outlook & Forecast 2023-2028" report has been added to ResearchAndMarkets.com's offering.

The U.S. financial wellness benefits market is undergoing a remarkable transformation, poised to surge to a value of $1.89 billion by 2028, up from $620 million in 2022, driven by a staggering CAGR of 20.49% between 2022 and 2028.

This exponential growth is reshaping the landscape of employee benefits, offering a significant opportunity for enhancing the financial health and well-being of American workers.

In 2022, the healthcare sector claimed the largest share in the U.S. financial wellness benefits market. Amidst the complexities of workforce volatility in the healthcare industry, where continuity of care is paramount, workplace financial wellness programs have proven to be a formidable tool in bolstering employee retention. With an industry turnover rate hovering around 21%, such benefits have emerged as a strategic solution to address turnover challenges and ensure the consistency of high-quality care.

The Southern region emerged as the stronghold in the U.S. financial wellness market, commanding over 34.82% of the market share in 2022. Comprising states such as Texas, Florida, Virginia, and Georgia, this region boasts some of the largest companies and a substantial workforce presence in the nation. Pioneering the adoption of health and well-being initiatives, the Southern region addresses pressing workplace stressors like long working hours, work-life balance, and heightened competition within the workforce.

The U.S. financial wellness benefits market thrives in its diversity, featuring a multitude of prominent players. Among these are forward-thinking start-ups and employee benefits providers that offer a range of services including employee assistance programs (EAPs), healthcare, and insurance. As fresh entrants, these innovative players are reimagining the landscape of financial services. One such transformational shift is the introduction of micro-savings solutions that challenge traditional savings account paradigms.

Prominent players in the U.S. financial wellness market are redefining the contours of financial well-being. Industry leaders such as Bank of America Merrill Lynch, Financial Finesse, Mercer, Prudential Financial, and Virgin Pulse are at the forefront of this evolution. Their strategic prowess and commitment to enhancing employee financial health underscore the transformative impact of financial wellness benefits in the U.S. workforce.

As the market continues its upward trajectory, the financial wellness benefits landscape in the U.S. is poised to reshape the way employees experience financial well-being, ensuring a more secure and prosperous future for workers across the nation.

MARKET TRENDS & OPPORTUNITIES

Increasing Growth in Early Wage Access

Employers are finding new ways to engage their employees and deliver value through new solutions, partnerships, and early access to their earned wages more than ever before. Considering that a major percentage of the U.S. population, or nearly 80%, is living paycheck to paycheck, even a small contradiction between earnings and expenses can thrust them into debt as many fees and bills Americans pay late, and it incurs costs that can add up quickly.

For instance, a bank overdraft fee can be over USD 30, and rent payments that are paid beyond the required date can be even heavier. Most individuals have little savings for emergencies, even those much smaller than the ones caused by the pandemic. While several organizations have been forthcoming about advanced wages, some don't, leaving employees with fewer choices, such as not meeting financial responsibilities, tapping into retirement savings, and high-cost, high-risk payday loans.

Integrating & Leveraging Existing Benefits

Financial wellness has found its place in the benefits space as a natural extension of health-based benefits, which are augmented and made more rewarding through physical and mental wellness programs. This is a good enough reason to mix in financial wellness and leverage an integrated approach for maximum benefits and impact on overall well-being.

Furthermore, although no specific definition can round off a financial wellness program, several elements overlap in the current benefits package. Financial wellness programs and benefits differ from the perspective of duration and recurrence.

INDUSTRY RESTRAINTS

Fiduciary Concerns Hinder Efforts

For businesses and organizations, there is a real threat of lawsuits that is fuelling reluctance to implement employee financial wellness programs and doling out benefits. The litigious environment has created a lot of panic among employers about possible repercussions from giving advice that can go wrong or not adhering to legal requirements and financial fiduciary responsibility. Several employers do not vet their services to create financial wellness benefits.

SEGMENTATION INSIGHTS

INSIGHTS BY PROGRAM

The U.S. financial wellness benefits market by program is segmented into financial planning, financial education & planning, retirement planning, debt management, and others. Among these, financial planning accounted for the highest share, followed by financial education & planning. Periodic employer encouragement can motivate employees to use these beneficial programs and lead to more proactive employees with positive outcomes. Vendors can work with top management in companies to implement changes.

INSIGHTS BY END USER

Large businesses end-user accounted for the highest portion of the U.S. financial wellness market. Large companies have always invested more in financial wellness, recognizing financial anxiety as a particularly serious issue.

However, they have only recently started offering a more full-bodied set of voluntary financial wellness benefits, occasionally with discounts or cash incentives, to help employees manage money. This is because leading companies with a diverse global workforce are beginning to see the link between financially well employees and how they work - aka employee productivity.

INSIGHTS BY DELIVERY

The U.S. financial wellness market by delivery is segmented into online, one-on-one, and group. The one-to-one segment accounted for the highest share of almost 48% in 2022. Organizations use various channels to deliver information to employees for financial wellness benefits.

Much of it depends on the size of the employee population, resources available, how employees want the information to reach them, the type of information or counseling, components involved, the density of the workforce in a particular location, and their geographical dispersion. These programs are delivered via in-person sessions, through the intranet, via email, through a screen, or in groups. Utilization varies by delivery and population, along with income.

INSIGHTS BY TYPE

The consumer tools type segment has the largest U.S. financial wellness market share. Consumer tools typically help employees develop financial action plans and budgets, games to facilitate saving, programs that help with debt management, budgeting and bill payments, and other approaches that can help employees understand their full financial picture.

While consumer tools aim at providing teachable moments, one of the paradoxes is that change takes longer and happens slower than anticipated. In addition, a major reason why individuals may want to speak to a financial expert is that it tends to have higher related accountability and motivation.

MARKET DYNAMICS

Overview

Cost of Stress to Us Corporate Sector
Employee Wellbeing in Us by State
Financial Wellness: An Overview
Financial Wellness: Framework
State of Us Healthcare
Economic and Demographical Analysis
Population
Income
Generation and Age Trends
Racial/Ethnic Trends
American Workforce Analysis

Market Opportunities & Trends

Growing Role of Wellness Champions
Increasing Growth in Early Wage Access
High Penetration of Gig Economy in US
Significant Interest from Investment Companies
Lack of Clarity on Financial Wellness
Growing Influence of Data Analytics in Financial Wellness
Rising Financial Wellness Incentives
Administration of Targeted Benefits

Market Growth Enablers

Changing Work Dynamics in US
Pandemic Fueling Demand for Financial Wellness
Integrating & Leveraging Existing Benefits
Employers Take Onus for Employee Financial Wellness

Market Restraints

Misalignment in Financial Wellness Offerings
Fiduciary Concerns Hinder Efforts
Elusive Returns on Investment
Low Employee Participation & Engagement

VENDOR LANDSCAPE

Key Company Profiles

Bank of America Merrill Lynch
Financial Finesse
Mercer
Prudential Financial
Virgin Pulse

Other Prominent Vendors

Aduro
Ayco
BaySport
Beacon Health Options
Best Money Moves
BrightDime
BrightPlan
Brightside
DHS Group
Edukate
Enrich
Even
Financial Fitness Group
Financial Knowledge
FinFit
FlexWage
FutureFuel.io
GoPlan 101
HealthCheck360
Holberg Financial
Health Advocate
Integrated Wellness Partners
LearnLux
LifeCents
Limeade
Money Starts Here
My Secure Advantage
Origin
Payactiv
Pro Financial Health
Purchasing Power
Questis
Ramsey Solutions
Salary Finance
Savology
Sqwire
SoFi
The Financial Gym
Transamerica
Your Money Line

For more information about this report visit https://www.researchandmarkets.com/r/tm45zb

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