Most workers are financially unhealthy despite trillions in employer spending. New research reveals why a foundation of essential benefits, not wages alone, drives lasting financial health.
Matt Bahl
Vice President and Workplace Market Lead, Financial Health Network
Every year, employers in America spend trillions of dollars on wages and benefits, including a projected $90 billion on workplace wellness programs alone. Many mid- to large-sized companies now offer their workers upwards of 50 benefits. So, why are approximately 69% of U.S. households not financially healthy, according to the Financial Health Network’s Financial Health Pulse research?
The disconnect is real, and it can be expensive. Financial stress costs employers in the United States an estimated $250 billion a year in lost productivity, driving burnout, absenteeism, and disengagement. This is often framed as an engagement or culture problem. However, at the root, it is a financial health problem, and until employers treat it that way, even well-designed well-being programs will struggle to deliver.
What actually moves the needle
We wanted to answer the question every human resources leader should be asking: Which benefits actually improve employees’ financial lives? To answer it, the Financial Health Network conducted its 2025 Essential Benefits study, a first-of-its-kind analysis of more than 8,000 workers. Four elements emerged as foundational to an employee’s financial health:
- Earning a living wage. Wages are the foundation of any benefits strategy. Workers whose earnings meet the basic-needs benchmark for their region have meaningfully higher financial health, even after controlling for demographics.
- Affordable health insurance. Coverage protects financial health, but only if workers can actually afford to use it.
- Retirement plan participation. Not just access, but participation is important.
- Paid family leave. Caregivers who use this benefit are significantly more financially healthy than those without it.
Design matters as much as access
Access alone is not enough to reshape how benefits get evaluated. Workers offered a retirement match are 21% more likely to participate than those who are not. Workers in high-deductible health plans who cannot fund a health savings account are statistically no better off, financially, than workers with no insurance at all.
Emerging benefits show real promise, too. Emergency savings accounts, childcare subsidies, and financial coaching are all associated with higher financial health, but their impact depends on whether the foundation is in place first.
For employers, none of this requires spending more. It is about making the most of the dollars already being spent, evaluating wages and benefits as an interconnected system rather than a menu of perks, and measuring success not by what competitors offer but by whether workers’ financial lives actually improve.
The advantage hiding in plain sight
Our research finds that workers in financially healthy households more frequently intend to stay with their employer, a meaningful data point when replacing a single employee can cost up to twice their annual salary.
As labor markets shift and workers grow more cautious about changing jobs, retaining existing talent becomes a critical business priority. High employee turnover leaves organizations understaffed, directly hurting output through lost sales revenue, delayed research and development, or reduced potential growth.
Companies that treat employee financial health as a fundamental part of their business will be better positioned to retain talent, sustain productivity, and compete. Prioritizing living wages and essential benefits is not just the right choice. It is a strategic decision that improves the bottom line when it comes to retention and employee resilience.
