The American Psychological Association’s Stress in America Survey maintains that personal finances are still one of the top causes of stress in the United States, with 60% of Americans reporting money as a significant source of stress. With finances already holding a top spot among sources of stress, and the financial impacts of the COVID-19 pandemic spreading across the globe, employees have never needed financial guidance more.
According to the Charles Schwab Modern Wealth Survey, 59% of Americans live paycheck to paycheck and 44% usually carry a credit card balance or struggle to keep up with bills. The survey found that only 28% of Americans have a written financial plan noting they think it’s too complicated or they don’t have enough time or money for a formal plan. Additionally, more than 20% of people polled by the National Financial Educators Council said they don’t have anyone to turn to for trusted financial guidance.
MetLife’s recent Employee Benefit Trends Study states that in a post COVID-19 world, the “new normal” calls for enhanced employee financial wellness for better management of work-life stress. 55% of employees who struggle are expected to postpone their retirement due to their financial situation. Plus, 52% of employees said they are concerned about their financial health in the wake of the pandemic. Employees with poor financial health also rated their mental, social and physical health significantly lower than the average.
However, the impact of financial wellness doesn’t stop with employees. Employers will often feel the effects of their workforces’ financial strain, from losses in productivity to losses in talent. In fact, U.S. businesses are losing $500 billion a year because of employees’ personal financial stress, according to Salary Finance.
The Bank of America Merrill Lynch Workplace Benefits Report found that employees are spending a median of 100 hours at work per year on personal financial matters. More than half of employees surveyed said they want their employer to provide them with financial literacy education to boost their own financial wellness. The report also found that employers who embrace their role in supporting their employees’ financial wellness may be better positioned to build more loyal and productive workforces.
PwC’s Employee Financial Wellness Survey found that financial stress is a major productivity disruption with one-third of employees saying they’re distracted by finances while at work. Additionally, 78% of employees that are stressed about finances said they’re more likely to be attracted to employers who offer financial wellness benefits. With that in mind, employers need to consider the costs associated with replacing an employee lost to a competitor, which can be up to 200% of the employee’s annual salary, according to a SHRM report on turnover.
Furthermore, the PWC recent survey also notes that in 2020, employers need to recognize the economic realities of COVID-19 and understand the important role they can play in helping reduce financial difficulties and stress their employees will likely encounter. Employees will need objective guidance as they recover financially and strive to protect themselves from future financial issues, and employers have a unique opportunity to help.
But how can employers help? It’s evident that now more than ever, receiving financial guidance employee benefits is vital for employees to help them improve their financial wellness so they can reach both short and long term financial goals. LifeCare’s high-impact financial support services are designed to empower employees by increasing their financial literacy and reducing stress. To learn more about how we can help you offer a customized financial wellness program contact us here or call us at (866) 675-3751.