The Workforce Blueprint: Why 401(k) and Financial Wellness Belong in Your Workforce Strategy

Financial stress can undermine employee well-being and productivity, making it essential for HR professionals to recognize its impact and feel empowered to foster a supportive environment.

For employers, that makes financial wellness more than a collection of optional perks. Retirement benefits, financial education, emergency savings tools, and other forms of financial support can be part of a broader strategy to attract and retain employees.

And for many companies, the 401(k) is an important place to start.

Here’s why retirement-plan strategy and financial wellness deserve more attention from employers.

Why Financial Stress Matters to Employers

Money is a significant source of stress for many Americans, and research has linked financial strain with effects that can extend into people’s personal and professional lives.

Employers cannot eliminate every source of financial pressure their employees face. But they can provide tools that may help employees improve their financial position over time.

Those tools can include retirement plans, financial education or counseling, student loan assistance, and emergency savings programs. The right mix will vary by workforce, but the underlying goal is the same: give employees practical ways to manage short-term financial needs while preparing for longer-term goals.

Financial wellness can also support an employer’s broader recruitment and retention strategy. Employees increasingly evaluate jobs based on the full compensation and benefits package, not salary alone.

Organizations that prioritize employees’ financial well-being can use these programs as part of a broader effort to support employees and strengthen the overall employment experience.

The 401(k) Opportunity Companies Can Miss

Simply offering a retirement plan does not guarantee that employees will use it.

Vanguard’s 2025 small-business research found that 59% of eligible employees in the small-business plans it studied participated in their employer’s retirement plan in 2024, compared with 82% in larger plans. One major difference was automatic enrollment: Only 24% of the small plans studied offered automatic enrollment, compared with 61% of large plans, which can help employees feel more supported and confident in their benefits.

The effect of plan design was substantial. Among plans with automatic enrollment, participation reached 81% at small businesses and 94% at large businesses.

That points to an important lesson for employers. Access matters, but so does plan design.

Employees may postpone enrollment, misunderstand their options, or simply fail to take action. Automatic enrollment, clear communication, understandable educational materials, and regular reminders can make it easier for eligible employees to participate.

SECURE 2.0 introduces new provisions that can empower employers-such as automatic-enrollment requirements and matching options-helping them feel proactive and in control of their benefits strategy.

These provisions do not apply to every employer or every retirement plan, so companies should work with their plan administrator or qualified advisor to determine which provisions apply to them and which optional features make sense for their workforce.

Financial Wellness Goes Beyond Retirement

A 401(k) can be an important part of financial wellness, but employees have financial needs long before retirement.

Student loan assistance is one example. Employers may choose to help employees repay qualifying student loan debt directly or, if their retirement plan permits, make matching retirement contributions based on qualified student loan payments.

Emergency savings is another area employers can address. Federal Reserve research continues to show that many households have limited financial cushions for unexpected expenses. Employer-sponsored savings tools can give employees another way to build reserves without relying entirely on individual initiative.

Financial education or counseling can also help employees better understand topics such as budgeting, debt management, saving, and investing. The value of those services will depend on the quality of the program and whether employees actually use it, but they can provide access to information employees might otherwise have to find on their own.

Other benefits can also contribute to financial well-being. Depending on eligibility and plan design, those might include dependent care assistance, health savings accounts, employer HSA contributions, and flexible benefit programs.

Employers should consider how various benefits-like retirement plans, student loan assistance, and emergency savings-work together to make employees feel valued and supported in their financial well-being.

Why This Matters for Recruitment

Benefits can influence how candidates evaluate an employment offer.

That makes financial wellness particularly relevant for employers that cannot or do not want to compete solely on base salary. A retirement contribution or match, financial education, student loan support, or another well-designed benefit can strengthen the overall compensation package.

The details matter. Candidates who care about retirement benefits may want to know whether a 401(k) is offered, when they become eligible, whether the employer contributes or matches employee contributions, and what vesting rules apply.

Others may place greater value on help with student loans, health care expenses, dependent care, or emergency savings.

There is no single financial wellness package that will appeal equally to every candidate. Employers can gain more useful insights by understanding the needs of their current workforce and the employees they hope to recruit.

Comprehensive financial wellness programs can therefore be considered alongside compensation, health benefits, career development, workplace flexibility, and other elements of an employer’s overall value proposition.

How to Audit Your Current Strategy

Start with your 401(k) participation rate, but do not evaluate that number in isolation.

Compare participation with relevant benchmarks, then examine the factors that may be influencing it. Look at eligibility rules, automatic enrollment, employer contributions, vesting, communication, employee demographics, and employee contributions.

Ask employees what types of financial wellness support they value most, considering workforce diversity to ensure programs are inclusive and relevant to different financial situations. This guides employers in creating targeted, effective benefits.

Next, view your benefits as a comprehensive financial wellness package. Does it help employees address immediate financial needs as well as longer-term goals? Are there obvious gaps?

Review your employee communications too. Retirement and benefits materials are often technical because they must explain complex plan provisions. Employers can supplement required plan documents with clear educational materials that help employees understand their options while preserving the accuracy of the official plan information.

Finally, evaluate cost alongside outcomes by measuring participation, utilization, employee feedback, recruiting results, retention data, and program impact to demonstrate ROI and effectiveness. This helps employers assess program success and justify investments.

What To Do… Starting Now

Begin by reviewing participation and utilization in your current retirement plan and other financial benefits.

If participation is lower than you would like, investigate why before assuming the plan itself is the problem. Eligibility rules, employee demographics, communication, plan design, automatic enrollment, and other factors can all affect participation.

Create a financial wellness communication plan. Decide how often employees will hear about retirement benefits, who will explain changes affecting the plan, and where employees can go when they have questions.

Review the SECURE 2.0 provisions that apply to your plan. Employers should understand both mandatory changes and optional features before deciding whether plan amendments or additional employee communication are appropriate.

Consider whether another financial wellness offering fits the needs of your workforce. That might be student loan assistance, emergency savings support, financial education, or another benefit identified through employee feedback.

If appropriate for your plan, evaluate automatic enrollment. For certain newer 401(k) and 403(b) plans, SECURE 2.0 already generally requires automatic enrollment, subject to statutory exceptions. For other plans, it may be an optional design choice. Research consistently shows substantially higher participation in plans using automatic enrollment.

Finally, communicate financial wellness benefits during recruitment. Explain the benefits accurately and give candidates enough information to understand how they contribute to the total compensation package.

The Bigger Picture

Employees make career decisions for many reasons, including compensation, opportunities for advancement, management, workplace culture, flexibility, benefits, and personal circumstances. Financial wellness will never replace all of those considerations.

But it can be an important part of the equation.

A thoughtful financial wellness strategy gives employees tools to prepare for retirement, manage competing financial priorities, and make better-informed decisions about their money.

For employers, the opportunity is not simply to add more benefits. It is to design benefits people understand, use, and value.

In 2026 and beyond, a strong workforce strategy can include more than salary alone. Retirement planning, student loan support, emergency savings tools, financial education, and other forms of financial support can all contribute to a more competitive employment package.

The goal is not to promise employees financial security. No employer can do that.

The goal is to give them better tools to pursue it.

INFINITI HR helps companies evaluate benefits and workforce strategies designed to support recruitment and retention. Contact us to learn more about building a benefits strategy for your workforce.

Want more on current employment trends? Check out the recent blog, Wellness Benefits That Actually Improve Retention, or come back for additional pieces on human resources, payroll, insurance, and benefits.