Navigating the new world at work
A guide to US financial services and insurance (FS&I) employees’ most pressing needs, and how your organization can meet them, based on Mercer’s 2023-2024 Inside Employees’ Minds study.
A slowing global economy, coupled with a challenging economic landscape, has put pressure on the FS&I industry in 2023, testing employers’ ability to generate income and manage costs.
These pressures are extending beyond the bottom line, they are also impacting the extent to which employers can support, reward, and incent their workforce. As a result, HR teams are taking action to evolve their employee experience — increasing transparency around pay and skills, identifying and solutioning for employees’ unmet needs, and holistically addressing well-being.
This study provides valuable insights on what’s top of mind for employees – which can help shape the 2024 people priorities for FS&I employers as they seek to optimize their talent strategy, considering both the short-term financial constraints and the long-term impact on employee engagement and productivity.
By finding the right balance between employee and business needs, employers can create a win-win situation where employees feel valued and motivated, while the organization maintains financial stability and competitiveness in the market.
How satisfied, engaged and committed are financial services workers?
While engagement increased on average 8 points across employees in all industries, results actually declined on most metrics for financial services and insurance employees. In 2023, employees were less likely to feel a strong of a sense of belonging to their team, were less satisfied with compensation and career opportunities, and are slightly more likely to say they are considering leaving their employer.
Engagement results are notably lower for women and diverse employees, particularly as it relates to compensation, careers and commitment.
Transparency around pay — and skills — can help
In 2023, pay transparency went mainstream, with legislation coming into effect in large markets such as California and New York — major markets for financial services and insurance employees. And certainly employees are taking advantage of this information, with over 60% of employees saying they’ve researched pay ranges through their employer’s job postings, and rising to over 70% of those below age 35. And the benefits of pay transparency are becoming increasingly clear, as employees who have access to their pay range reporting significantly higher levels of engagement and commitment.
Pay Transparency pays off
Employees who believe they are paid fairly are twice as likely to have access to their pay range — and are more than twice as willing to recommend their employer and say they are committed to their organization.
My manager/employer provides me with the pay range for my job.
Pay transparency should not stand alone — but rather be complemented by transparency around the skills needed to succeed — and the impact on outcomes around pay and careers. Employees who say their organization or manager has provided them with the skills they need to advance are nearly 50% more likely to say they are committed to their organization (78% vs. 54%) — and those who say their career goals can be met are nearly twice as committed (77% vs. 44%)
When it comes to transparency, on the surface — the majority of financial services employees say their organization provides them with information around pay and skills. However, women and diverse employees are far less likely to say they have information about pay and skills in order to advance careers and pay. This presents an opportunity for employers to embrace transparency in a more holistic way in order to boost perceptions of fairness — and career satisfaction — as a means of driving greater commitment in the workforce.
What keeps employees up at night?
2023 has brought new concerns and shifting priorities for financial services and insurance employees. Despite slowing inflation, financial concerns amongst employees are increasing.
Comparable to last year, covering monthly expenses retains the top concern, with ability to retire as the number two concern — which has increased relative to last year. But the most significant change is the increase in concern around personal debt — up to the #4 spot (compared to #8 last year).
“This, combined with the significant rise in cost of living, is putting significant pressure on financial services and insurance employees — despite the fact that 40% of the workforce earn more than $100K per year.
What will move the dial on well-being?
Workload and work-life balance remain top concerns for financial services and insurance employees — and concerns have increased since last year. When asked what type of support would most benefit their mental health and prevent burnout at work, employees point to changes in work practices: More flexibility — both at work and from work, reduced workloads, better resources, and where and when work is performed. This is especially true for entry level professionals, where nearly half (47%) of employees rated time off in their top 3, compared to only 1 in 3 managers.
While mental health concerns remained relatively flat overall as compared to last year, they remain the #2 concern for the youngest employees (below age 35), as well as LGBTQ+ employees and those with disabilities. While it’s clearly important to help employees manage mental health issues and burnout when they arise, survey results suggest that changing work practices might help prevent them.
Despite headlines, employees are largely satisfied with flexibility
When it comes to flexibility, the vast majority (85%) of financial services employees say they are satisfied with their company’s flexible work arrangements. Satisfaction is most pronounced amongst those who work remotely (96%), but remains high for hybrid employees (82%). Employees who work fulltime onsite are the least satisfied (74%). These high satisfaction levels are despite nearly half of employees (49%) saying they want to work remotely full-time — even though only 33% are currently working in fully remote roles.
The good news for employers: Employees working in hybrid arrangements are more engaged, satisfied and committed relative to their peers – with those working onsite 4-days per week being the most engaged. Engagement scores for those who worked 3-days onsite closely followed and was the most prevalent hybrid work arrangement reported by employees. These findings will validate the decisions most FS&I employers have made regarding return to office plans, as most companies have adopted a 3 or 4 day a week on-site policy. However, it is important that organizations evaluate the trade-offs that exist specifically in their workplace when thinking about balancing remote, hybrid and in-person work.
Where does your organization stand?
Take action to become an employer of choice
Financial Services and Insurance employers have an opportunity to stand out by addressing employees’ unmet financial needs, enhancing the work experience to improve well-being, embracing flexibility, as well as transparency around pay, skills and careers. Learn more about actions you can take to support employees in the financial services and insurance sector.
Contact your Mercer consultant
Whether you need support understanding the needs and experiences of your own employees, or taking action to improve the health, wealth and careers of your workforce, Mercer has an expert who can help.