By Rachel Fox from Sunny Day Fund. Article originally appeared in the May 2025 edition of Voluntary Advantage’s Voluntary Benefits Voice Magazine. Click here to see the full feature.
Imagine a house with no foundation. When a storm comes, the walls sway, the floor floods, and the roof is on the verge of collapse. It becomes unlivable. No matter how beautiful the building or the neighborhood, without a firm foundation, the house is sure to crumble.
Today’s typical worker is that house with no foundation. Grocery bills are swelling. Healthcare costs are spiraling. Rent is rising. Student loans have come due. The economic storm is already here, and without the firm financial foundation, those workers’ lives are drowning in uncertainty.
So what do we do?
The common solution has been more financial education and literacy – which we know can help. Unfortunately, education alone can feel like an umbrella in a hurricane, and it struggles to scale. Employees need more. They need to achieve financial resilience: savings, stability, and systems that support them before, during, and after the storm.
In this article, we share why and how delivering those systems makes economic sense. And how doing nothing erodes most organizations’ strongest asset – their workforce.
What Employers, Brokers, & Carriers Have To Lose
Uncertainty is a tax. When a business faces uncertainty, it makes hard, often austere decisions. When an individual faces uncertainty, it causes “financial precarity” – a term attributed to the research from University of Pittsburg Katz School of Business Professor Carrie Leana.
Since a financial precarious person’s working memory – a cognitive function – is processing how to juggle upcoming bills with their own job uncertainty and family obligations, their brain is literally paying less attention to the job at hand, leading to costly, stress-induced mistakes.
Physical health suffers too. A study from the 2008 Global Financial Crisis found that worsening financial situation amidst economic uncertainty was a strong predictor of worsening physical health.
How does that show up? If an employee can’t pay a $400 emergency expense, it doesn’t stay neatly contained in their bank account. That strain shows up in every part of their life – from missed or skipped doctors’ appointments to unfilled prescriptions to anxiety and mistakes at work. All of which eventually lead to costlier claims and premiums.
Mental health also takes a hit. The research is clear: employees are reporting higher stress, more anxiety, and less capacity to focus or engage at work.
And so when employees are forced to choose between a prescription and a utility bill, between a student loan repayment and physical therapy, they’re not building a future – they’re just making it to Friday.
Employers as a Stabilizing Financial Force
In an uncertain world, stability is magnetic. Employees crave it. Economies depend on it. Employers have a real opportunity to be the stabilizing force that employees are seeking. A reliable paycheck is only a part of the solution. Employees are looking to their employers for ways to lessen their overall financial precarity.
Specifically, employees need and want access to tools that create real financial breathing room that lets them navigate life’s inevitable and immediate ups and downs. Today’s standard package comes with market pay, a healthcare plan, and a retirement plan. But are those tools enough to make someone less financially precarious?
Forward-thinking employers are starting to leverage a modern framework to map out what those tools look like for their specific workforce, to nudge them from precarity towards economic security & freedom.
The above illustration shows how one can think about an employees’ financial horizon over time, from immediate "how do I get by?" concerns to long-term hopes about retirement and legacy. It’s a reminder that financial decisions and considerations aren’t just one-time events — it’s a constant thread that changes as life progresses.
For employers, building a financially resilient workforce means offering compensation and benefits that meet employees where they are today and where they hope to go tomorrow. That could mean emergency savings accounts to handle the unexpected, financial coaching or certifications to boost mobility, and retirement solutions that help people dream about and plan for the future. A well-rounded benefits package isn’t just about checking boxes; it’s about creating a path toward lasting financial security, mobility, and freedom.
And it can vary by industry or the organization itself. So the new standard package may mean technology companies offer tuition reimbursement, while quick service restaurants offer quicker access to pay.
But across all industries and incomes, the focus on emergency savings has never been higher – and it makes sense as the primary way to build a financial resilience and foster financial confidence.
Why Workplace Emergency Savings Programs Work
An employee’s financial well-being is shaped by their life circumstances and dreams. Everyone will need emergency savings, and they also have big milestones that cost money – personal and financial goals that they want to accomplish. Not taking those milestones into account today only creates another kind of financial emergency tomorrow. That’s why a goal-based savings approach to emergency savings is so powerful: they meet people where they are in their journey, not where we assume they should be as a number.
- It’s built for real life. Employees aren’t saving for abstract ideas – they’re saving for a car repair, a new apartment deposit, a medical bill, and holiday gifts for their kids.
- It’s flexible. Unlike 401(k)s or other tax-deferred accounts, employees can withdraw without penalties when life demands it.
- It’s safe. Employees deserve a safe place to put their hard-earned money, free from hidden fees, predatory practices, or market fluctuations.
- It’s preventative. As highlighted in this ASPPA article, by offering accessible liquidity, employers help workers avoid dipping into retirement funds early, preserving long-term financial dreams while meeting immediate needs.
The result? A healthier, more secure workforce that isn’t just reacting to crises, but proactively preparing for them. And having savings leads to better decisions about work, health and life.
For example, Professor Leana’s research found that a logistics company whose drivers participated in a workplace emergency savings program saw an 87% reduction in traffic tickets.
In a recent Broadridge webinar, Prof Leana and Sid Pailla, Founder of Sunny Day Fund, shared how impactful emergency savings empower employees to avoid costly debt and stay afloat during times of financial crisis. That’s the power of behavioral change.
Sunny Day Fund’s own clients Tom and Sheri Schrader, owners of Cottage Care (a nationwide residential cleaning company) recently said “Our employees can now track their savings at any given time, withdraw into their own bank accounts, and earn incentives to save. We believe it creates yet another point of loyalty with our employees.”
Financial Wellness is Complementary, Not Competitive, to Retirement
A costly mistake that some employers, their consultants and advisors make is assume that a focus on short term financial security means fewer contributions to retirement or worse retirement metrics. This couldn’t be farther from the truth.
Firstly, financial resilience may have multiple support layers: financial coaching, debt management support, emergency savings, retirement savings, and more – much like the earlier illustration. Many are already investing in a variety of these solutions. But the place to start is listening to the employees. Understanding what they need today and where they dream of going tomorrow ensures that the benefits actually deliver the desired outcomes.
Secondly, a more comprehensive financial wellness strategy actually creates better results for retirement plans, just like with healthcare. For example, when someone builds up a $1,000 in emergency savings, they’re half as likely to tap retirement savings for costly loans and early withdrawals. Other employers have actually reported an increase in retirement participation and contributions.
And finally, employers and consultants alike have defaulted to financial education and advice for action. As shared earlier, we know that’s helpful but not enough. Consider the conversion rate of an education-related program activating ~4% of the population towards new savings or other financial actions, versus a dedicated emergency savings program achieving 40%-60% participation.
Why is that? When employers integrate savings directly through payroll, automatically open a high-yield workplace emergency savings account in seconds, and reinforce new savings habits with company contributions, they remove barriers and make lasting behavioral change possible – just like they do with retirement savings. The same goes for college debt repayment or other financial commitments. So advice is essential, but it must be paired with the resources to act on it.
Leading Through Uncertainty Requires Action
Employees are plagued with economic uncertainty and are looking to their employer – their trusted source for their paycheck – for help. Employers don’t have to solve every financial problem their employees face, but they can offer meaningful benefits that remove barriers, automate actions, and spark momentum. Behavior change happens when the path is made easier.
Employees are navigating an environment where uncertainty is the only constant—and life is not about to get cheaper. From rising rents and everyday essentials to looming economic shifts, the pressure is mounting. But waiting until the crisis hits home is not an option. Employers who lead now won’t just support their teams through today’s challenges—they’ll be the ones thriving in tomorrow’s economy.