5 Potential Workplace Benefits That Can Strengthen Employees’ Financial Health & Productivity

In a time of great change, HR leaders must keep a sharp eye out for ways to bring stability to their workforce and add value at low cost. Firms with large hourly and low-to-moderate-income (LMI) workforces have an opportunity to drive business value—and benefit their employees and communities—by seeking to strengthen workers’ financial health.

An underutilized solution?  Workplace financial benefits designed specifically to address the financial stressors faced by more than 50% living paycheck to paycheck.

The opportunity in financial benefits starts with recognizing that the pressing needs – the things that keep your team members awake at night – are not always the same for LMI hourly workers as for salaried, more highly compensated talent.

Investing in financial benefits can be a smart strategy, as 74% of employees report they would be likely to leave their job for an employer offering better financial benefits. Additionally, Mercer’s research has shown that tenure may be the single largest human capital driver of a company’s financial and operational performance. While the cost and timeline of implementation vary depending on the complexity of the benefit, the payoff—in increased engagement, retention, and productivity— may exceed the investment.

Workplace Financial Benefits That Strengthen Core Offerings

Retirement and health benefits remain foundational and essential to address financial well-being holistically; however, there is a tremendous opportunity for employers to intentionally go beyond. For instance, while a 401(k) plan may help workers build toward a secure future, additional benefits are needed to help employees meet immediate needs and avoid compromising their participation in long-term savings programs. Drawing from Commonwealth’s research, here are a few examples of intentional workplace financial benefits that illustrate how employers may bolster the value of their core benefits, like retirement and healthcare. These intentional workplace financial benefits often have a low cost for implementation.

1. Preparing for Emergencies: Expanding Workplace Savings

Hourly workers face enormous financial volatility – in income and expenses – and the fear of a financial surprise is inescapable for many.  A growing body of research reveals that accessible savings – even a few hundred dollars – can be a powerful first step and deliver peace of mind. Employers have an immense opportunity to facilitate and support workers in building up and using savings by:

• Offering standalone emergency savings programs, with or without matching funds, to help employees prepare to cover unexpected expenses without resorting to credit or personal loans.
• Integrating emergency savings within retirement plans, enabling automatic enrollment and allowing workers to have emergency savings for short-term needs, while continuing to build and prioritize long-term savings.

2. Increasing Income: Leveraging Tax Time

Many hourly workers struggle with the cost of living, and additional income can reduce their financial stress significantly. For these workers – especially those with children – federal tax benefits like the Earned Income and Child Tax Credit may offer significant boosts at tax season. Research shows that too many workers miss out on these credits, and many overpay for tax preparation services.  Employers can help workers secure and maximize the credits they qualify for by:

• Providing tax preparation resources and discounts through partnerships with tax preparation services.
• Increasing awareness of free tax prep services like the IRS’s Volunteer Income Tax Assistance (VITA) and AARP Tax-Aide​.
• Encouraging savings from tax refunds, helping employees build emergency funds and long-term financial security​.

3. Addressing Barriers to Retirement Savings: Tackling Student Loans

Student loan balances weigh heavily on millions of workers, and for LMI employees in particular, can be a chronic strain on families’ finances. Research from J.P. Morgan Asset Management and EBRI underscores this well-documented barrier to retirement savings, with over 43 million Americans collectively carrying $1.7T in student loan debt. Employers can play a pivotal role in seeking to alleviate this burden in a way that supports recruitment and retention by:

• Helping employees build retirement savings while paying off debt by utilizing the SECURE 2.0 Student Debt Retirement Match, which allows employers to match student loan payments as contributions to an employee’s 401(k) plan— helping employees build long-term savings while paying down their obligations.
• Providing trusted guidance, resources, and tools that increase awareness of currently available student loan repayment support options and prevalent scams, helping workers manage repayment effectively and avoid student loan fraud.
• Offering tax-free student loan repayment assistance, up to $5,250 per year (for student loans and other education expenses), an opportunity now made permanent and adjusted annually for inflation due to the One Big Beautiful Bill Act. As employers consider how these changes impact them, it may be a prime opportunity to review overall benefit options.

4. Preventing Financial Crises: Preparing for Medical Costs

According to Mercer’s “Inside Employees’ Minds” research, only 63% of hourly workers feel they can afford healthcare without financial hardship. To help employees avoid unexpected medical costs that can derail financial plans, employers can potentially:

• Promote Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs), and help employees understand the potential tax advantages of these tools and how to use them to budget for out-of-pocket healthcare expenses.
• Consider funding HSAs and FSAs on behalf of the employee to cover deductibles and other medical-related expenses.
• Pair healthcare benefits with emergency savings programs that help buffer against surprise costs.

5. Investing in Workers’ Families and Children: Promoting 529 College Education Plans

Many workers face the dual challenge of paying down student debt while trying to plan for their children’s education. With 529 education savings plans, individuals can potentially address both goals simultaneously by directing up to $10,000 to repay student loans and saving for their children’s future education. This offers a rare opportunity for employees to seek to reduce financial obligations with a benefit that has a low barrier to entry and is easily accessible for employers and employees. As highlighted recently by JPMorganChase and Commonwealth, “offering workers earning LMI a 529 plan is a win-win scenario for employers.” Yet awareness and access remain a challenge. Less than 1% of families earning a low to moderate income currently save via a 529 and fewer than 11% of employers currently offer payroll deductions for 529s. Just 2% offer contribution matches. Employers are uniquely positioned to support workers navigating education costs through:

• Raising awareness and providing information on the availability and benefits of 529 plans, and how even small contributions can grow significantly over time.
• Enabling payroll deductions for 529 contributions to make regular saving simple and automatic.
• Offering employer contributions or matching funds to encourage savings and promote growth, and/or raising awareness of available state tax credits for 529 contributions.

Some employers may also be eligible for a regional tax credit or deduction, as seven states incentivize local businesses for helping drive 529 plan participation.

Education and awareness are critical—but not sufficient on their own. Employers who pair education with actionable, intentional offerings that speak directly to the financial reality millions of hourly workers face daily may see stronger utilization and more impact.

Now Is the Time to Act

As financial stress continues to impact productivity, retention, and employee well-being, workplace financial benefits have emerged as a timely and impactful solution. Employers considering next steps should focus on three key priorities:

• Start with your workforce. Assess where financial strain is showing up—whether it’s missed work, low participation in existing benefits, or high turnover—and listen closely to what employees say they need.
• Build on what you already offer. Financial benefits don’t need to be built from scratch. Strengthen the value of core offerings like healthcare and retirement by layering in supports that help employees manage immediate expenses.
• Plan for phased implementation. Some benefits can be launched quickly, while others require longer timelines or operational changes. A thoughtful rollout—paired with clear communication—can drive sustained engagement and measurable outcomes.

In this time of change, intentional action can help address employees’ most pressing worries— and help move the organization forward.

Sara Vipond, a Senior Associate with Mercer’s Wealth Practice, contributed to this article.