State of the Workplace Study 2023

Our annual State of Workplace III Financial Benefits Study reveals an increased focus on workplace benefits, which can serve as a key engagement driver for employees and a continued opportunity for employers.

The third annual State of the Workplace Study focuses on the evolving role and significance of workplace benefits as economic uncertainty unsettles both workers and their employers. With continued inflation and market volatility culminating in fears of a possible recession, employees are seeking more support even as employers search for ways to do more with less and drive greater efficiencies. 

Expanding on trends from the previous year, data indicates that competitive workplace financial benefits have only grown in importance as financial stress emerges as a key concern for employers and employees alike: More than 83% of HR leaders worry that employees’ financial issues could affect their productivity, while 66% of employees agree that financial stress is negatively affecting their work and personal life. 

As employees focus more intensely on and look for more from their workplace financial benefits, employers are taking notice. Yet, HR leaders don’t feel confident they can meet employees’ needs: Many companies are even facing the difficult choice to scale back, with one in four HR leaders sharing that they are trimming employee financial benefits to prepare for a possible recession—suggesting a growing disconnect between employee needs and what HR leaders can realistically provide during turbulent times. 

Against this backdrop, this year’s study provides key insights into evolving HR leader and employee views of their workplace benefits and how both groups are navigating financial tensions.  

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Financial Benefits Under the Microscope

Nearly 69% of employees say they are more carefully reviewing their financial benefits (up 9% since 2022)—suggesting a need for more comprehensive offerings. And while HR leaders agree there’s an opportunity for their companies to respond, economic uncertainties are forcing many to make hard choices. Find out how rising to the challenge or retreating to the sidelines may influence employee retention.

Equity Compensation–A Powerful Engagement Tool

The perception of equity compensation as a benefit has evolved in recent years, as it’s now considered to be a primary driver to meeting long-term goals. For the first time since the study began, participants cited “meeting long-term investment goals” as the top use of equity compensation. HR leaders and employees are aligned in saying that having a benefits plan that includes stock ownership is the most effective way to stay engaged and motivated.

Ongoing Considerations: Financial Stress and Productivity 

HR leaders increasingly worry that employee stress will negatively affect performance at work. Employees echo this concern, agreeing that outside stressors impede their work, and call attention to the growing need for financial wellness benefits—especially retirement planning guidance and access to a Financial Advisor.

Younger Generations Are Cutting Back on Savings and Retirement 

For the first time in history, the workforce includes five generations of workers.² Providing a retirement solution that can address the needs of diverse age groups and backgrounds isn’t just a good idea—it’s a strategic business decision. But this challenge remains complex, especially with today’s financial pressures. Some employee groups are struggling more than others. While more participants across the board seem to be reducing contributions to their savings and retirement accounts compared to last year, this is especially pronounced among the younger cohorts, with Generation Z (78%) and millennials (80%) scaling back at almost double the rate of their Generation X (58%) and baby boomer (40%) counterparts.³