The compound annual growth rate from 2022 to 2028 is forecasted to reach 20.49%
The market for financial wellness benefits in the US is forecasted to undergo a surge in its value by 2028, as found in a report from ResearchAndMarkets.com.
The report entitled US Financial Wellness Benefits Market - Industry Outlook & Forecast 2023-2028 showed that the value of the market is expected to reach $1.89 billion by 2028 — an increase from the $610 million in 2022. The compound annual growth rate (CAGR) between 2022 until 2028 is set to reach 20.49%.
Market findings in 2022
The report found that the sector that had the largest share in the US financial wellness benefits market is healthcare. Workplace financial wellness programs were seen as an effective tool in strengthening employee retention. This kind of benefit was found as a solution to the 21% turnover rate in the industry and make sure that high quality care is consistent.
34.82% of the market shares in 2022 were found in the Southern region which became the stronghold for the financial wellness market. It pioneered the adoption of initiatives concerning the health and wellbeing of employees while also addressing problems in the workplace that hinder the performance of workers such as long working hours, work-life balance, and increased competition among co-workers.
Startups and employee benefits providers that provide employee assistance programs (EAPS), healthcare, and insurance were also introducing micro-savings solutions. This is a shift from the usual paradigm of savings accounts.
Market trends, opportunities, and restraints
There are emerging methods to engage with employees that are utilized by employers such as allowing early access to a worker’s earned wages. With nearly 80% of Americans living on paycheck to paycheck, organizations who do not provide early salary access for their employees leave them with few choices when it comes to paying for expenses. This may cause them to tap into retirement savings and high-cost, high-risk payday loans.
Mixing financial wellness with health-based benefits through physical and mental wellness programs can allow employees to maximize their benefits. While several elements of a benefits package can overlap, financial wellness programs and benefits can still differ when it comes to duration and recurrence.
The threat of lawsuits is unfortunately hindering the implementation of employee financial wellness programs and the distribution of benefits. Additionally, there are many employers who do not closely examine the services they offer in order to create benefits concerning financial wellness.
As such, some employers often worry about the possible legal repercussions of such efforts in financial wellness as giving incorrect advice or the inability to follow legal requirements and financial fiduciary responsibility.