Four years ago, as the pandemic raged, Chipotle Mexican Grill leaders heard employees discuss their money woes and offered a financial counseling benefit to help them cope. This year, it expanded its financial wellness offerings to include student debt repayment, pay-on-demand, and a special debit card that helps users build a credit profile.
Daniel Banks, Chipotle’s director of global benefits, said that more than 73% of its roughly 125,000 global employees are members of Gen Z who are racking up credit card debt quickly and aren’t confident in their money-management skills.
“We knew folks in Gen Z are really experiencing significant financial challenges.… We were listening to our employees and hearing about all these concerns and on top of all the concerns that the pandemic was bringing about,” Banks said. “We knew we had to expand our offering again, to really focus on that holistic well-being and so offering up those financial well-being [benefits] was the right thing to do.”
Gen Z, single parents, and caregivers are in especially financially precarious positions, according to a report by The Guardian Life Insurance Company of America. Yet, overall workers are not happy with their financial situations. Only 32% of workers rate their financial wellness as excellent or very good, the report said. That’s down from 44% in 2022. Even in the midst of the pandemic in 2020, 37% of workers rated their financial wellness as excellent or very good.
It makes sense the second most requested benefit among workers is resources to help with their finances, with nearly a third of employees desiring it, according to a report by the Employee Benefit Research Institute and Greenwald Research. The first request was to have employers pay a greater share of benefits’ cost, with 51% of workers citing that as their preference.
There have been signs of employee financial stress going back for years. For example, about seven years ago, payroll software company Paylocity noticed that more workers were getting more salary advances from their employers. That’s when it started offering a service that allows employees access to part of their salaries before payday, though it has become more popular with workers in the last four or five years, said Steve Beauchamp, the company’s former CEO and current executive chairman.
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Beauchamp said current economic conditions such as high inflation mean “folks are stretching their dollars as much as they can, and sometimes getting themselves in a situation where they need access to dollars at a faster speed than their regular paycheck.”
Carlyn Sanchez, corporate director of human resources at Noble Hotels & Resorts, said the company started offering pay-on-demand about two years ago after some employees said they were turning to high-interest rate lenders to cover sudden expenses. She said the benefit provides an upside for the company because employees facing financial issues may not be able to get to work or be too distracted to perform their responsibilities well. For example, an employee may not be able to go to work because they can’t afford to fix a flat tire.
“We’re looking at this as a benefit for when life happens,” said Sanchez.
Next year, the company plans to offer live, quarterly sessions with financial experts to help employees learn about issues such as budgeting. Sanchez says it has provided written and recorded financial information to employees, though thinks the ability to ask questions will enrich the offering.
“[We] continually strive to look for ways to help our team members,” Sanchez said. “We know that people go to work in order to earn their income, so [financial wellness is] an important space for us.”