Identify Solutions

Step 1: Assess Gaps

Once you’ve diagnosed your employees’ needs, a financial health gap assessment can help you identify areas in your current programs and policies that could be improved with enhancements to existing programs or new solutions.

Step 1: Assess Gaps

Conduct a FinHealth Gap Assessment

A gap assessment is a review of your current programs and policies, with an emphasis on access and adequacy. Do your employees have access to programs that support their financial health? Are your programs and policies adequately addressing your employees’ most pressing needs? The goal is to identify gaps that could be met with enhancements to existing programs or new solutions.

Then, you can line up the gaps in access and adequacy with what you know about the needs of various employee segments (see the Diagnose Needs section of this Toolkit). Are there certain areas where the gaps you identified and your employees’ needs overlap? This can be a useful starting point as you start to consider potential solutions.

What data can I use to conduct a financial health gap assessment?

Here are some examples of data points to consider when conducting a financial health gap assessment. This list is not exhaustive, but illustrates the types of data that can help you identify gaps in your current programs and policies. Just as when diagnosing needs, it’s important to keep an eye out for differences among employee segments based on demographics or job characteristics.

  • Are your employees offered benefits that help them with day-to-day expenses, such as transportation assistance or childcare benefits?
  • What is your company’s policy regarding how far in advance schedules should be provided for hourly employees?
  • Are your part-time employees eligible to participate in your 401(k) or other retirement plan?
  • Do your employees have the ability to automatically save a portion of their paycheck to a liquid savings account, through split deposit, as part of a 401(k) plan, or through another mechanism?
  • Are your employees offered benefits that help them pay down their debt or improve their credit score?
  • Do you provide an employer match or other incentives for paying down debt?
  • If you offer a High Deductible Health Plan, do you provide an employer contribution or match to an HSA or HRA?
  • Are your part-time employees eligible for paid leave if they or a family member become sick or are injured and in need of care?

Where Needs and Gaps Meet: A Hypothetical Example

Imagine that in response to your survey, a significant number of employees report that they have less than two weeks’ worth of living expenses in emergency savings.

In looking at your benefits data, you discover that few of your hourly employees participate in your company’s 401(k) plan, and a fair number of those who do participate have recently taken out small loans from their retirement accounts.

This data would suggest that your hourly workforce may lack emergency savings, which may even lead them to borrow against their 401(k) when unexpected expenses arise, if they are even able to contribute at all.

Then, your financial health gap assessment may reveal that, though your company pays its hourly workforce a living wage and offers generous health and retirement benefits, it doesn’t currently offer any tools to help employees to save for the short term. Given the serious risk to employees’ long-term security from drawing down 401(k) balances or not saving for retirement at all, you and your team might decide to create an emergency savings benefit as part of your 401(k) plan (i.e., “sidecar” savings).

Employer Spotlight: UPS

Promoting Emergency Savings

The benefits team at UPS has always encouraged its employees to save for retirement by contributing at least enough to their 401(k)s to receive the employer match. Yet when they took a step back and looked at their data, they realized that debt and a lack of access to affordable credit were major sources of financial stress for their employee population. They began to ask themselves, “How do we help our people with everyday financial needs?”

As part of BlackRock’s Emergency Savings Initiative, UPS worked with the nonprofit Commonwealth, in collaboration with its 401(k) recordkeeper Voya, to develop an emergency savings program that leverages its existing retirement infrastructure. Through the Initiative, UPS is experimenting with ways to encourage employees to participate and will track the impact of its efforts on employees’ emergency savings.13, 14

  1. BJ Dorfman and Matt Soifer, “Short-term, not short-sighted: Emergency savings at work,” BlackRock, November 2020.
  2. Anne Tergesen, “UPS to Offer Employees a Way to Save for Emergencies,” Wall Street Journal, October 2020.

Step 2: Prioritize Solutions