Can Financial Capability be Built at Work?

Background and Purpose: EFWPs are an emerging practice with the potential to help meet social work’s Financial Capability and Asset Building for All grand challenge by reaching greater numbers of households through the workplace than community-based programs. To build the evidence base about EFWPs, this study examined interest and experiences in offering or receiving EFWP services from the perspectives of employees, employers, and EFWP providers.

Methods: A mixed-methods, descriptive research design included survey data from Low- and Moderate-Income (LMI) employees (n=16,675) and companies offering or interested in offering EFWPs (n=93). Employee survey items included questions about availability, use, outcomes, and perceived value of eight EFWP services and employees’ financial circumstances. The employer survey examined EFWP services offered, reasons for offering services, and implementation challenges. Semi-structured telephone interviews with a subset of employers (n=21) shed light on employer survey responses and intensive case studies (n=5) of employer-EFWP provider dyads further illuminated employers’ motivations for offering EFWPs and their experiences with program administration and utilization.

Results: Employees’ average income was ~$17,000 and liquid net worth was <$1,000. Most (53-56%) employees said their companies did not offer financial coaching or payroll advances/loans; more than a third were unsure. Utilization rates were highest for direct deposit to savings (83%) among employees who said it was very difficult to cover their regular expenses. The least commonly offered EFWP was payroll advances/loans (17%). Employees who used payroll advances/loans had average liquid net worth of $3,363 lower than employees who did not use them (p<.001), suggesting the attractiveness of payroll advances/loans to LMI employees. Large companies (≥1,000 employees) were more likely to offer EFWPs than smaller ones. Fifty-three percent of employers felt that EFWPs resulted in greater loyalty to the company; 41% thought services improved productivity among employees. Uncertainty about the benefit to employees was the top reason for not offering EFWPs, while costs topped the list of actual or anticipated challenges in offering services. Telephone interviews revealed a lack of consensus about the definition of EFWPs and the absence of efforts to measure program impact or return-on-investment. Most employers did not conduct formal needs assessments. Case study participants, who were selected for their commitment to EFWPs, identified employee wellbeing as a key motivator for offering EFWPs. Participants measured utilization accurately but relied on anecdotal information to assess program effectiveness. EFWP providers successfully limited the administrative burden on employers, removing a barrier to program adoption.

Conclusion and Implications: Variation in the financial circumstances of LMI employees may drive interest in different types of EFWPs, suggesting that employers should carefully assess employee needs before offering services. Qualitative data suggest that financial coaching and payroll advances/loans may particularly benefit LMI employees, who may lack access to safe and affordable short-term credit options (Pew Charitable Trusts, 2016). Pending clearer evidence of impact, employers could offer EFWP services as a way to help employees improve their financial well-being, absent the expectation that services will result in increased productivity or reduced absences.