Why your total rewards pitch isn’t resonating

Morgan Stanley’s sixth annual State of the Workplace Financial Benefits Study conducted by Wakefield Research across 1,000 employed U.S. adults and 600 HR leaders, turned up two numbers that sit strangely next to each other.

Sixty-one percent of employees are reducing their contributions to workplace benefits. Ninety-one percent say they would consider changing jobs for benefits that help them reach their financial goals.

People are pulling money out of the benefits they already have while telling you they would switch employers for better ones.

That is what financial pressure looks like from the inside. Fifty-six percent report that money stress is affecting their work, and 80% of HR managers agree it is hurting productivity. When cash gets tight, the retirement contribution is the easiest lever to pull, because the pain of pulling it is deferred for decades.

The recruiting read on this is uncomfortable. Your total rewards pitch is aimed at people who are currently disinvesting from the very thing you are pitching. A generous match is a weak argument to someone who just dropped their contribution to zero.

The study also found that 53% of HR leaders consider financial stress-reducing benefits the biggest driver of job satisfaction, ahead of mental and emotional support at 26% and physical wellness at 19%. Employees named budgeting, goal setting, and retirement planning as their top gaps. Those are guidance problems, and guidance is cheaper than another plan design.

Worth asking this quarter. Does anyone in your organization know what percentage of your employees stopped contributing this year, and has anyone asked them why?