State of the Workplace

Financial Benefits Study

Introduction
The COVID-19 pandemic forced a massive shift in the
way we work. It also sparked a reset in thinking about
how employers can best help employees manage their
financial lives, including during times of hardship. The
conversation between employees and HR executives has
evolved: Now more than ever, employers must do more
to maximize financial benefits for employees; it is both
crucial and expected.

The inaugural State of the Workplace Financial Benefits

Study from Morgan Stanley at Work highlights the
economic challenges that employees have faced amid the
pandemic, as well as newly emerging views on financial
benefits in the workplace.

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Table of Contents

Executive Summary 04

Financial Benefits 06

Financial Wellness 13

Equity Compensation 19

Conclusion 24

Methodology 25

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Executive Summary
Employee financial well-being is increasingly being
recognized as essential to business success, yet many
companies are not appropriately positioned to help. As
financial and retirement benefits take hold as a
competitive advantage, companies who want to win the
race for talent need to catch up before it’s too late.
The State of the Workplace Financial Benefits Study
explores the role and value of financial benefits, including
equity compensation, financial wellness and retirement
preparation, assessing both employer and employee views
of their organization’s benefits package, such as the
essential benefits needed for employees and employers to
reach their goals.
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Key Takeaways
01
Employees are in financial
distress and want help
Employee financial challenges coming out of
the pandemic are common and varied, with
top issues that include personal budgeting,
debt and short-term savings. Employers have
an opportunity to step up with offerings that
reduce stress, boost confidence and improve
workplace performance.
02
Equity compensation
can be a differentiator
Equity compensation is rising in importance
as employees of all levels and age brackets –
especially Millennial and Gen Z – seek a
greater connection with their employer.
Effectively scaling an equity compensation
program so that rank and file employees can
access and understand the benefit can be a
key driver of loyalty and satisfaction.
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Financial wellness offerings
are a competitive advantage
Employees want comprehensive financial
support. Companies that focus on
delivering the right mix of benefits can
help their employees and the bottom line.
Nearly all HR executives are placing
priority on re-evaluating financial benefit
packages for 2022.
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Financial
Benefits

6
The pandemic-fueled uncertainty has led many employers to focus
more attention on how to deliver financial benefits that meet their
employees’ needs. Employees are now looking for employers to offer a
full spectrum of financial benefits, tools, and guidance to help them
along the right path financially. As a result, those companies that offer a
robust benefits package that includes retirement planning, equity
compensation, student loan refinancing plans, and overall financial
wellness benefits will differentiate themselves in the race for talent.”

– Brian McDonald
Head of Morgan Stanley at Work

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Key Insights Employees and employers
see the need for more
financial guidance.
More than four in five employees
and nine in 10 employers believe
their companies should be more
involved in helping employees
understand how to maximize
financial benefits.
Employees link financial
benefits to retention.
More than nine in 10 employees
(91%) say they’d feel more invested
in staying with the employer if
offered financial benefits that met
their needs.
Employers see that
there is more work to do.
HR executives feel there is
room for improvement to stay
competitive, with 79% citing that
lack of financial benefits will
result in attrition.

Employees believe these Employees are paying more

financial benefits should be
a priority—and employers
plan to make it happen.
90% of employees say their
company should prioritize re-
evaluating its financial benefits
package in 2022. Meanwhile,
95% of HR executives say their
company’s re-evaluation of their
financial benefits package for 2022
is a moderate to high priority.
attention to their financial
benefits than they were a
year ago.
In fact, 61% of employees are
now paying more attention to the
financial benefits offered compared
to a year ago. This is particularly
true among Millennials, where 69%
are more focused on reviewing
these benefits.

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Employees want help to manage financial challenges, but HR Executives say their
companies have fallen short
HR Executives agree that employers should be more involved in navigating their employees’ personal financial troubles. However, for many, the
availability of such personalized resources simply isn’t there.

Employee View HR Executives View

Employers should be more involved But nearly 4 in 5 of HR Executives say
helping with specific employee 23% employees have requested support that
financial troubles N=1,000 No, never
the company does not offer N=600

Completely 29%
disagree 3% Yes, once
Strongly
3%
disagree
Somewhat
10%
78% HR Executives say employees
disagree have requested support that would fall under
Somewhat 49% financial benefits that their company does not offer
agree
27% Yes, more
than once
Strongly
agree
26%
Completely
agree
30%

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Many HR Executives say their company offers financial wellness benefits;
Digging deeper, there is room for improvement
The majority (71%) of HR executives do not think they’re on a good path, and 51% say that despite improvements, current company financial
benefits are not competitive.

71% Of HR Executives do not

think their company is on a good path

Current strength of company

financial benefit package
offered to employees 51%
(Among those whose company provides a
benefits package to employees N=577)
29%
18%
2%
On a good path Making some Major concern Haven’t given it the
improvement but that we’re not thought it deserves
not enough addressing well

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Employees and employers agree on the need to prioritize a review of their financial
benefits in 2022
How much of a priority should it be for your company to review its financial benefits in 2022?

Employee View: HR Executives say companies HR Executives see

(Among employees whose company provides a benefits package, N=773) financial benefits as a
update employee benefits difference-maker when
when… it comes to employee
retention.
HR Executives View:
(Among HR executives whose company provides a benefits package, N=577) HR finds a new offering
65% that would benefit staff
53%
48%
42% 42% Benefits pricing
79%
54% changes

There are enough employees

Nearly 4 in 5 HR
52% requesting to do so executives (79%)
say employees will leave
8% for another job if their
4% There is a lot of company does not offer
2% 1% 33% [staff] turnover financial benefits.
Not A Priority Low Priority Moderate Priority High Priority

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Financial
Wellness

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The pandemic produced a negative impact on the financial wellness of
employees across a variety of industries, roles and personal situations.
Through these crises, however, rose an opportunity for employers to
meet the challenge and help their employees like never before, through
workplace assistance for short- and long-term financial needs like
budgeting, managing debt, building emergency savings, and planning for
retirement. And given the hardships employees have faced throughout
the pandemic, financial wellness tools are evolving from added value
benefits to must-haves.”

– Krystal Barker Buissereth

Managing Director & Head of Financial Wellness at Morgan Stanley at Work

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Key Insights
Employees lost financial
footing amid the pandemic.
91% of employees report having
faced personal financial issues, with
the top three being: household
budgeting (47%), debt reduction
(42%), and emergency and short-
term savings (30%).
Employee contributions to all
financial accounts took a hit.
More than half (59%) of employees
said they needed to reduce
contributions to savings, debt, or
loan payments that occurred across
401(k) savings accounts (29%), long-
term savings (28%), emergency and
short-term savings (25%), and debt
and loan payments (25%).
Employees and HR HR executives and employees
executives alike see the impact have an idea where to start.
of personal financial stress
on work productivity and About 1 in 3 (34%) HR executives and
1 in 4 employees (21%) say student
performance.
loan repayment management is
64% of employees report that financial an essential benefit to helping
employees meet their personal
stress is negatively affecting their
financial goals.
work and personal life, while 82% of
employers are worried that personal
financial issues affect employee work
productivity.
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HR Executives have taken notice of employee financial hardship
Over half (59%) say employees regularly* mentioned experiences where they were facing financial issues.

How often employees Financial issues experienced over the past year
bring up financial hardships (Asked among those who have heard employees bring up financial hardships or challenges
N=600 N=579)

Never
4%
43% 40% 40% 40%
Rarely 11% 37%
34% 32%
Sometimes 27% 25%
Often 43%
All the time 16% Financial
crisis
Drawing on
emergency
Unable to
manage
Not having
emergency
Challenges
paying off
Reducing
401(k)
Irresponsible
spending
Not knowing
how to utilize
savings money savings debt or loan contributions equity comp
& finances or stock

* Regularly means all the time or often.

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Contributions across savings accounts are down
59% U.S. employees have needed to reduce contributions to savings or debt or loan payments due to the economic impacts of COVID-19.

U.S. employees reduced contributions to the following accounts due to COVID-19 N=1,000

29% 401k 28% Long-term 25% Emergency 25% Paying off 19% Health 29% Contributing
savings and short-term debts and loans savings to a college
savings accounts savings fund

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Employees and HR Executives alike see the impact of personal financial stress on work
productivity and performance
COVID-19 has blurred personal and professional boundaries, which may account for greater visibility of specific financial hardships. COVID-19 has
also had an enormous reach in negatively affecting employee economic situations, leading HR executives to call for benefits to help employees
better manage financial stress.

HR Executives View
Importance of offering benefits to better manage
stress now vs. pre-COVID-19 N=600
64% of U.S. Employees
report financial stress is negatively
49%
affecting their work and personal life
38%

87% of HR Execs
82% of HR Executives 13% say benefits to help
are worried that employees’ financial Employees financial stress
issues outside of the office affects their are more important today
productivity compared to before
About the same Slightly more Much more
as before important important COVID-19

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The result: increased responsibility for employers to help staff maximize the financial
benefits offered to them

Attention paid by employees to review financial benefits

(Among those whose company provides a benefits package, N=773)

87% of U.S. Employees

say their companies must help them
understand how to maximize their
employer-provided financial benefits
36%
About
61% the same
More amount of
attention attention

93% of HR Executives (net)

agree their company must do a better 84% of HR Executives

job helping employees maximize the say their employees give more
financial benefits offered to them attention to reviewing their financial 3%
benefits now vs. a year ago Less attention
(net)

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Equity
Compensation

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Equity compensation is a powerful motivator that can help employees
meet their financial goals, while helping employers attract and retain
talent. As this benefit continues to be sought after by employees at all
levels, the need to effectively scale becomes critical. Further, for
companies to optimize this offering, they must be mindful of awareness
and comprehension gaps among employees and provide them with
meaningful communication and educational tools so they can maximize
the advantages of their equity.”

– Scott Whatley
Managing Director & Global Head of Equity Solutions, Morgan Stanley at Work

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Key Insights
Employers and employees
agree that equity
compensation is a powerful
motivator.
93% of HR executives and 75%
of employees agree that equity
compensation and stock ownership
is the most effective way to
motivate employees.
Equity compensation
correlates with the
perception of best-in-class
benefits.
Employers believe that equity
compensation is a driving factor
for “best-in-class” benefits. Nearly
nine in 10 (89%) HR executives
at companies that offer equity
compensation strongly or
completely agree their company
provides “best-in-class” benefits,
versus only 56% at companies that
do not offer equity.
Employees cite a variety of
ways equity compensation is
appealing.
Employees diverge over what
makes equity compensation a
strong motivator, with the top
three choices being “Gives me
a stake in the success of the
company” at 27%, “helps meet long
term goals” at 26%, and “provides
an additional source of income” in
third with 23%.
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Equity compensation: a great motivator for employees
Employees and HR Executives largely agree that equity compensation goes a long way to motivate and keep employees engaged in their roles. It
goes a long way at keeping them at their companies too, as most employees say they would stay if there was a greater emphasis on such benefits.

93%
HR Executive View: a benefit plan
with equity compensation is the most
75%
effective way to motivate employees
N=600 86%
Employee View: equity compensation
is the most effective way to keep
employees motivated N=1,000 Of employees would be
25%
more invested in staying
at their present company if they
8% placed a greater emphasis on
equity compensation
Disagree (net) Agree (net)

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Equity compensation correlates with the perception of best-in-class benefits.
Employers believe that equity compensation is a driving factor for “best in class” benefits.

89% vs. 56%

Nearly nine in ten (89%) Only 56% HR Executives at

HR Executives at companies that companies that do not offer equity
offer equity compensation strongly
or completely agree their company
provides “best in class” benefits

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Many reasons were cited why equity compensation is a desired benefit

Employee View
Biggest benefit to equity compensation
N=1,000

Men more likely than

women to say equity
gives them a stake in
23%
the company’s success
(31% vs. 23%)
27% 26%
15%
9%
Gives me a stake Helps meet Provides additional Validates None of these
in success of the long-term source of income performance as an
company investing goals employee

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Conclusion
The emphasis and focus on financial benefits over the
past year is likely here to stay for years to come.

And the data suggests that while there is still work to do,
employers and HR executives are listening and stepping
up to the plate – elevating workplace financial benefits as
a priority and re-evaluating their offerings to best help
their workforce.

Employers recognize that financial benefits can help to

reduce stress, improve employee retention and set their
company apart in the marketplace. Employees who are
less stressed about finances can be more focused and
productive on the job.

In an evolving workplace landscape, great things can

happen when employees feel their financial needs are
being met by their employer.

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Methodology

The data from the Morgan Stanley at Work State of the
Workplace Financial Benefits Study comes from a survey of
1,000 U.S. employed adults and 600 HR executives.
Quotas were set for both audiences to match
representative distributions, including for company size,
benefits status and seniority.
The survey was conducted on behalf of Morgan at Stanley at
Work using an email invitation and an online survey between
September 21 and September 28, 2021 by Wakefield
Research (www.wakefieldresearch.com).
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About Morgan Stanley at Work
Morgan Stanley at Work offers a suite of financial solutions, which spans Equity
Compensation through Shareworks and E*TRADE Equity Edge Online, Retirement
and Financial Wellness Solutions. Morgan Stanley at Work combines cutting-edge
planning and risk management software, Morgan Stanley intellectual capital and
financial education delivered through multiple channels to enable employees to
build a holistic plan to achieve their financial goals. Employee stock plan solutions,
including Equity Edge Online, are part of the Morgan Stanley at Work solutions and
are offered by E*TRADE Financial Corporate Services, Inc. Morgan Stanley at Work
currently has offices in the U.S., Canada, Europe and Asia Pacific.

Wakefield Research is neither an employee of, nor affiliated with, Morgan Stanley
Smith Barney LLC (“Morgan Stanley”).

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About Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing
investment banking, securities, wealth management and investment management
services. With offices in more than 41 countries, the Firm's employees serve clients
worldwide including corporations, governments, institutions and individuals. For
more information about Morgan Stanley, please visit www.morganstanley.com.

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