National Employee Benefits Day: Focus on frontline employees

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Future-ready financial wellbeing

This National Employee Benefits Day, as companies celebrate the theme — future-ready financial wellbeing — they should consider providing benefits that enable frontline employees, especially women, to achieve their financial wellbeing goals. Two important benefits that contribute to frontline employee financial wellbeing and help businesses become employers of choice are paid parental leave and retirement plans. Offering these benefits not only improves employees’ financial security but also drives positive business outcomes through greater engagement and retention, which collectively strengthens the overall economic stability of the workforce.

Paid parental leave

Paid parental leave is a foundational benefit that supports the financial wellbeing of all employees and can provide crucial financial stability during a significant life event, while also helping mitigate the long-term financial disadvantages that many mothers, in particular, face. But in a recent survey of frontline employees across nine industries in the United States,1 we found that only 30% of employees have access to paid parental leave, with a significant disparity between men (34%) and women (27%)2 — highlighting the uneven support offered across gender lines.

For women, the absence of paid parental leave exacerbates the motherhood penalty, which shows up as significant wage gaps and career setbacks after having children. Without paid leave, many women are forced to choose between taking unpaid time off or returning to work and possibly compromising their own and their babies’ health and wellbeing.

Expanding access to paid parental leave for men as well as women can help alleviate some of the financial and caregiving burdens disproportionately placed on mothers. In fact, research has shown that when fathers take paternity leave it reduces the motherhood penalty.3 Furthermore, when fathers take leave, caregiving responsibilities are more evenly distributed, reducing the need for mothers to take unpaid time off or cut back on work hours — both of which impact4 long-term earnings and retirement savings. Greater parity in paid leave access can strengthen household financial stability and improve economic outcomes for working families.

Retirement plans

Similarly, retirement plans are vital for long-term financial wellbeing. For frontline employees, they are a critical tool not only to ensure financial stability post-retirement, but to also make retirement a viable option.

In our survey, only 44% of frontline employees and 51% of frontline managers reported that their company offers retirement plans.  

Without retirement benefit options, many frontline employees risk facing financial insecurity both during their working years and later in life. This can be especially devastating since many frontline jobs are physically demanding, making them difficult to do as employees approach or pass retirement age.

Endnotes

  1. We surveyed 4,055 frontline employees in the United States, between the ages of 18 and 75 (mean = 40 years), in a variety of industries: construction (n = 569, 14%), finance and insurance (n = 419, 10%), hospitality (n = 699, 17%), manufacturing (n = 606, 15%), mining, quarrying, oil and gas extraction (n = 31, 1%), retail (n = 1,157, 29%), transportation and warehousing (n =  368, 9%), utilities (n = 61, 2%), wholesale trade (n =  145, 4%). Our sample was about equal parts cisgender men (n = 1,920, 47%) and women (n = 2,062, 51%), with some representation of other genders (n = 67, 2%). The sample was racially and ethnically diverse, comprising: Asian American and Pacific Islander (AAPI; n = 246, 6%), Black or African American (n = 1,208, 30%), Indigenous (n = 210, 5%), Latine (n = 599, 15%), Middle Eastern and North African (MENA; n = 45, 1%), and White (n = 2,553, 63%). A little over one third of the respondents were in non-managerial roles with no supervisory responsibilities (n = 1,491, 37%), one quarter were in non-managerial roles with supervisory responsibilities (n = 1,017, 25%), and the rest were in first line or frontline managerial roles (n = 1,547, 38%). Note that participants could skip demographic questions, so totals may not equal 100% or total sample size. For race and ethnicity, respondents could select more than one answer, so totals exceed 100%.
  2. A chi-square test of independence revealed a significant relationship between gender and paid leave access at work, χ² (2, n = 2503) = 15.39, p <.001, with men being more likely to have paid parental leave than women.
  3. Anderson, S. H. (2018). Paternity leave and the motherhood penalty: New causal evidence. Journal of Marriage and Family 80(5). 1125-1143.
  4. Shabo, V. (2024, August 19). Paid leave is back on the agenda: Exploring the economic and social benefits. New America; Palladino, L. & Lala, C. (2021). The economic effects of investing in quality care jobs and paid family and medical leave. Political Economy Research Institute.