Rodney (00:10): Krystal, in today's talent market, what is the importance of workplace benefits?
Krystal (00:15): So much of what we do in financial wellness is focused on people's financial security. In today's environment, our employees are imparted with so many different headwinds, whether it's higher inflation, high cost of living, volatile equity prices. So it's not surprising that 84% are reaching out and saying, "I expect more of my employer to help me weather these economic storms."
Rodney (00:40): Absolutely. Craig, is there anything you would like to add to that?
Craig (00:43): Yeah, workplace benefits have certainly evolved. As we've come out of the pandemic and as we are coming out of the great resignation, the needs and wants and demands of employees have certainly changed, and it's a challenge for companies. They need to have a wide spectrum of flexible benefits that they're offering to their employees, and a lot of that is around financial wellness. So things like child care, tuition reimbursement, student debt. They need to have programs that are meeting employees during their journey of where they are in their lives. So that's the challenge that companies are facing and it's not a one-size-fits-all.
(01:18): One of the challenges companies are also facing is that employees and employer perceptions of things like financial benefits are not the same. Employees want more financial benefits. Employers are reducing their investment in financial benefits. In fact, one in four over the course of the last year have said, "We're going to reduce our financial benefits because we believe a recession is coming." So that employer-employees are certainly at odds on that topic, which is a challenge that they're going to need to work through in the future.
Rodney (01:55): Krystal, Craig, you both mentioned the current environment and how it's been challenging. We're talking about the great resignation that we just came out of, talking about the current inflation that's going on. Let's talk about the challenges when it comes to implementing the types of workplace benefits that employees need today. Krystal, I know you've implemented a lot of programs over your career. How do you help employees and employers navigate the current challenging environment?
Krystal (02:26): Yes. Well, I'm actually still surprised that there is a gap between what employers think their employees want and need and what employees actually want and need. And to the point where employees, if you ask them who has a financial wellness program, only a third will say that they do. You go ask their companies. 90% of companies now say that they have a financial wellness program. Well, talk about a gap there.
(02:53): So what does that mean? Where there's a gap, there's an opportunity. That means that perhaps the programming that we're providing that companies are providing are not meeting the needs of the participant of your employees. And what they're looking for is, yes, long-term planning around retirement is important. Helping navigate through equity markets is very important, but so is the day to day. How do I tackle inflation, child care, responsibility, gas prices, all those, so I'm not derailed. My long-term vision is ever more important. So when we think about a financial wellness program, it has to be that full continuum.
Rodney (03:31): Yeah. And it makes sense that employers are focused on those long-term goals where employees, especially with inflation going on, they want that short-term, "Hey, I'm living paycheck to paycheck. Retirement is something so far off that I can't do anything about it today."
(03:51): So Craig, looking at employees and participants, in this current environment, how would an employer go about educating them to help them meet some of those short-term needs and what is going on?
Craig (04:05): I mean, it's a great question, Rodney. I mean, education is critically important for the employee base around financial wellness and what all of these individuals are challenged with. One of the things I wanted to share is that that the perception of benefits for employees, employees believe, 88% of employees believe that they're not receiving enough benefits from their companies. Conversely, 70% of companies we work with don't feel confident that they're offering the right set of benefits to their employees. One way to address this is through education. The most successful companies think about building out a comprehensive, diverse, and robust education program for their employees. That's just not the basics of equity 101 or investing 101 or savings 101. It's much beyond that. It is financial wellness topics, things like financial considerations for families with disabilities, financial considerations for the LGBTQ+ community. These are the types of education sessions that employees need and are asking for. Companies need to be prepared to deliver that.
Rodney (05:11): It's a continuation of a theme we've seen in workplace benefits where it's about the personalization of benefits.
Craig (05:18): Absolutely.
Rodney (05:19): Yeah. Where the employees are saying, "Listen, what you're delivering is just too generic for me."
Craig (05:25): Rodney, one of the things we see successful with a lot of companies is how they listen to their employees. So you don't know the answer to what your employees need until you ask. One way of doing that... We work with a lot of companies to deliver survey. Sounds fairly basic, but delivering a survey will allow you to get the data to make intelligent decisions around what were you going to offer around financial wellness. And most successful companies are doing that.
Rodney (05:53): Yeah. It's funny because according to research from the Employee Benefit Research Institute, only just over 40% of companies have conducted a financial wellness needs assessment. So to your point, Craig, how do you know what your employees need if you're not asking the question? And I know you've certainly seen that, Krystal.
Craig (06:11): Absolutely.
Rodney (06:11): Where companies, like you talked about that, that disconnect, their definition of financial wellness versus their employee's definition of financial wellness.
Krystal (06:20): That's right. We need to meet employees where they are, but how do you know where to meet them if you don't ask. You don't find out. Absolutely.
Rodney (06:27): Yeah. (06:32): Krystal, I want to ask you, a lot of companies are talking about building a culture of wellness, but a large part of that is a culture of financial wellness. How do you go about doing that and helping employers understand the part that financial wellness plays in the overall well-being of employees?
Krystal (06:51): Well, I like you to use culture because that's pretty interesting, so we should play on that theme here. What we know from the data that financial stress is the highest level of stress for employees. That's above work-related issues, health issues, mental health issues, family issues. But what we find is that that's because all those other challenges tend to have a financial impact. And so as HR leaders, our job is always think about, "How do I add value to my people?" If you add value to your people, find out where they're stressed and how to help. Well, it's really hard to bifurcate the financial challenges someone's having from their mental health, our physical health. And so what our recommendation's always been is take a look at those other benefits programs and figure out, "Is there a way I can also support them financially in their financial health or looking at that mental health benefit and figuring out, oh, there is a financial implication here"? So it's all tied together for that holistic.
Rodney (07:51): It's fascinating that you talk about that because the data shows in a survey that Morgan Stanley at Work did with SHRM, is that 1 out of 5 employees are experiencing finance-related depression, and 1 out 3 are experiencing finance-related anxiety. Yet less than 10% are going to a mental health professional to seek help for that depression, for that anxiety. Less than 10% are talking to a financial professional about their finance-related anxiety and depression.
Krystal (08:23): And just imagine how that translates into the workplace, like, "How can I focus and be productive at work if I'm worried about my budget or how this is implying and impacting my health and so forth?" So it's such an important topic.
Craig (08:39): Yeah. I mean, stress is real. I'm glad we're talking about that. In our recent workplace study, 66% of the respondents said they're dealing with financial stress. That is a big problem for companies. And what they're also seeing is that it's impacting not only their work lives, but also their personal lives. The good news is that companies are reacting to this and they are offering financial wellness programs. In fact, 9 out of the 10 companies we work with do offer a financial wellness program, which is great, and they need to be doing that. And financial wellness is really about putting participants on the right path, putting the right plan in place to help them meet their financial obligations. That's where we want to get them. That's where successful companies are going, and that's what they're delivering to help their employees.
Rodney (09:28): Workplace benefits continue to evolve like everything in our society, especially when you look at the pandemic, going through the pandemic, coming out of the pandemic, geopolitical turmoil, the current effects of inflation. Tell me, Krystal, I'll start with you, where do you see the current financial wellness or workplace benefit trends being today and possibly where you see them going?
Krystal (09:55): At Morgan Stanley at Work, our philosophy has always been meet participants where they are. And so even before the pandemic, we were already evolving our offering to do that. So whether it means I like to learn online, that's where I like to engage, so we always had a digital education platform. Or meeting face-to-face with an advisor. That multiple way of interacting is now no longer a nice-to-have. It's a need-to-have. And so that's one of the trends we see, being able to operate on different types of mode, whether it's virtual, digital in-person, offline, online, all of the above.
(10:33): But the second piece that we are seeing in the industry, as you mentioned Rodney, is that it's a challenging economic environment. So a lot of the benefits had focused on those long-term planning. Now all of a sudden, no matter where people are in their financial journey, they're starting to get a little nervous. It's like, "Well, should I go back and really rethink about my budget?" Or, "How I'm putting my kids to private school?" Or "I have kids going to college." What do all those mean? So supporting participants and employees along that entire financial journey and bringing them very personalized advice and solutions is what we're seeing a lot of focus on in this environment.
Rodney (11:14): What's interesting is that when you ask employees about their top sources of stress, saving for emergencies is number two, right after saving for retirement, and it wasn't like that a few years ago. So because of the difficulty, living paycheck to paycheck, employees know that they're just one emergency away from financial disaster.
(11:36): Craig, I'd like to also pose that question to you, your thoughts on workplace financial benefit trends?
Craig (11:43): Yes, Rodney, there are a multitude of challenges that companies are faced with today and employees are faced with as well, whether it be student debt management, loans, planning for college savings, planning for retirement. These are all things companies need to be thinking about as they think through how are they're going to plan for the future. So trends are continuing to evolve, which makes it extremely difficult for companies to manage and deal with.
(12:10): One of the things we are really focused on, and this is something that Krystal alluded to, is meeting participants during their journey. We look at the financial wellness journey as a series of moments from when they're receiving equity, where they have a need to create liquidity for the purchase of a home, they may need to sell equity for to help pay for college tuition, we have to be there at the right time, at the right moment to be there both digitally, in-person, offering advice to help employees through that process.
Rodney (12:44): Craig, I want to pick up on something that Krystal talked about. She talked about being able to deliver that digital solution. And we've seen a lot of advancements in technology over the past couple of years. Can you talk about how technology can augment what's being delivered when it comes to workplace benefits?
Craig (13:06): Technology has always been at the forefront of everything we do at Morgan Stanley at Work. Offering digital solutions supported by education and advice is part of our DNA. One of the things we're really focused on with our digital experience is OpenAI. This is a very popular term right now, a big trend in the industry. There's a lot of thought leadership information going around around OpenAI. It's a focus for us as well. One of the things we're focused on in the digital experience are things like chatbots, chatbots that can learn as questions are being asked around financial wellness, around needs for education to support equity or retirement. That's a focus of ours and it's a constantly evolving technology.
Krystal (13:51): One of the amazing things about technology is how we bring customization to the financial wellness experience, because that's been the hard part to do, without a human who can sit in front of you and actually go through your situation. But how do we scale that but also allow people to have that interaction at a time in place that works for them? That's the beauty of technology and using AI tools. So we're able to give content in a real-time basis. Understanding, "I'm going through a life event. What are my next resources? What questions do I actually ask when I meet with someone?" That's what we'll be able to deliver through artificial intelligence.
Rodney (14:32): The possibilities are just endless when you think about what artificial intelligence can do. I heard an HR leader recently talk about this possibility, and what they said is that imagine that you've just had a child and they can tell because of your medical claims. And then right at that point, the financial wellness program kicks in and says, "Hey, let me tell you about saving for your kids' college education." And it's all tied together through technology, through that intelligent learning method.
