Workplace emergency savings accounts (ESAs) are an increasingly popular new benefit with high-profile employers such as Delta, Amazon and Humana. As the data trickles in, these accounts are demonstrating an incredibly high return on investment (ROI) for employers.
Saving for emergencies is often the No. 1 financial priority for individuals and reports have shown that this is even ahead of retirement or paying down debt. However, saving has consistently been a challenge for Americans with savings rates at or near an all-time low.
Therefore, it was no surprise that early research from AARP showed 77% of employees surveyed would participate in a workplace emergency savings program if their employer offered one. It was as high as 90% if their employer offered an incentive.
Based on case studies, it has been proven that a successful workplace emergency savings benefit has several key features. They include a dedicated savings account for emergencies, ease-of-use and access to funds, automatic payroll deductions and an employer incentive (i.e., $100 to $150 per employee per year).
When incorporating these key components, an ESA will often see an adoption rate much higher than most wellness benefits.
We’ve seen a lot of success, with adoption rates averaging about 60%. Additionally, our users typically hit $400 in savings in four to six months and more than $1,000 in 12 to 18 months. Monthly retention rates for employees are typically 99%, with most employers increasing the number of active employees each year.
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