Building financial resilience: Why employers should champion employee emergency savings
How supporting employee financial wellness benefits businesses
Financial stress is a growing problem for many employees. Unexpected costs like medical bills, car repairs, or home maintenance can be especially difficult for those without emergency savings. A recent study showed that only 41% of Americans could comfortably cover a $1,000 emergency with savings, down from 44% the previous year. Most would have to rely on credit cards, loans, or family assistance.1 Even without these surprises, many workers struggle to make ends meet due to rising living costs. Both employees and employers must focus on building financial resilience – the ability to prepare for and recover from financial setbacks.
Emergency savings can safeguard employees from household financial crises, and impact workplace productivity, morale, and overall well-being. Employers have an opportunity to play a crucial role by offering benefits and solutions that enable employees to build stronger financial safety nets.
Why emergency savings matter for employees
Life is unpredictable, and emergencies can occur when least expected. Without a financial cushion, employees may face significant challenges, such as:
- Falling into debt: Without adequate savings, employees often turn to high-interest credit cards or payday loans, which can trap them in a cycle of debt.
- Delayed life goals: Unexpected costs can derail plans for major milestones, such as purchasing a home or saving for retirement.
- Heightened stress: Financial insecurity impacts stress, which can affect mental and physical health, diminishing overall quality of life and can exacerbate underlying health conditions.
When financial stress bleeds into the workplace, the problems compound. Stressed employees may become less productive, take more sick days, or struggle to perform at their best. Therefore, the need for solutions to improve financial wellness is clear – not just for employees' benefit, but also for organizations’ bottom lines.
How employers can help
Employers are in a unique position to support their workforce by promoting financial well-being and helping employees improve their financial resiliency. Here are several ways businesses can provide meaningful solutions:
1. Offer Emergency Savings Accounts (ESAs)
Introducing employer-sponsored emergency savings accounts is one of the most effective ways to help employees prepare for unexpected expenses. These accounts allow employees to set aside a small portion of their paycheck in a separate savings account dedicated to emergency use. By offering automatic payroll deductions, employers make saving simple and seamless for their team members.
Some companies may also choose to match employee contributions to emergency savings accounts, like how employers match 401(k) contributions. This creates an added incentive for employees to save consistently over time. Interested in learning more? Register for our Solution Spotlight Series webinar on April 10, focused on how discreet financial well-being solutions, like emergency savings, can be incorporated into your benefits offering to improve workplace outcomes.
2. Provide financial education
Many employees lack the tools or knowledge needed to make informed financial decisions, which can hinder their ability to save. Employers can bridge this gap by offering financial education workshops, online courses, or access to financial professionals. Topics could range from budgeting basics and debt management to strategies for building emergency savings.
Financial literacy programs equip employees with valuable knowledge while reinforcing the organization's commitment to their overall well-being. Employees who feel supported by their company are more likely to stay engaged, helping to retain skilled talent.
3. Partner with benefit carriers that offer financial wellness
Take advantage of programs that offer tailored financial wellness solutions for employees. These programs often include solutions and tools for savings, goal-setting, and financial planning. Employers can partner with carriers to provide employees with access to user-friendly, accessible resources that promote financial security.
New York Life recently launched Balance Wellbeing™, a new platform designed to bring financial wellness resources directly to employees, supporting them at every stage of their financial journey. Now available to eligible Group Benefit Solutions clients, Balance Wellbeing™ focuses on making financial security accessible and personalized. To learn more about this new tool, visit www.balancewellbeing.com.
4. Explore hardship assistance programs or employee relief funds
Employees often turn to the workplace for financial security. Interventions during the employee experience prove helpful, especially during a financial challenge or life event. Hardship assistance programs – such as employer-provided loans or grants, offer employees quick access to funds in times of need. Employee relief funds can also help to provide immediate assistance. These programs provide short-term relief while reducing the burden of high interest borrowing.
While such programs require thoughtful planning and policies to ensure fairness, they can make a significant difference in employees’ lives during emergencies.
5. Promote a culture of well-being
Employers play a powerful role in destigmatizing personal struggles. Building a culture of open communication and support around experience, specifically financial ones, can make employees feel more comfortable seeking help and taking steps toward improvement.
Leadership can demonstrate empathy by normalizing conversations about money, promoting the use of available financial wellness resources, and helping to navigate relevant offerings. Incorporating financial well-being into broader health initiatives and encouraging people leaders to be advocates for existing benefits and programs can help encourage engagement with your benefits offering, improving usage and value while optimizing costs.
The value of investing in employee financial health
Providing support for emergency savings can be a win-win. Employees who feel financially secure are usually better equipped to stay focused and motivated, which can improve engagement and performance. Additionally, companies offering robust financial wellness benefits often stand out as employers of choice, leading to improved retention and recruitment. The average health benefit cost per employee has increased by 16%+ in the last five years and is projected to continue.2 As financial stress continues to be a common thread throughout health-related issues, investing in the financial health of your workforce has become a business priority.
Tackling specific financial challenges, such as unexpected expenses, is key to building a strong employee well-being strategy. By offering financial education, access to financial advisors, and Employee Assistance Programs (EAPs), organizations can improve their benefits and foster a culture of well-being.
1Bankrate’s 2025 Emergency Savings Report, January 2025.
2Mercer, “2023 National Survey of Employer-Sponsored Health Plans,” fielded mid-June through late August 2023.
SMRU 7647733 Exp. 02.20.2028