By Pension and Benefits Editorial Staff
U.S. employees’ financial wellbeing has improved, but many still live paycheck to paycheck, overspend and remain worried over the future state of their finances. The fallout from these financial problems leads to a broad set of issues that negatively affect many workers’ lives. These findings are according to a survey of 8,000 U.S. employees by Willis Towers Watson.
The Global Benefits Attitudes Survey found 43 percent of U.S. workers are satisfied with their financial situation, an increase from 35 percent in 2017. Employee satisfaction with their finances has now recovered to levels seen between 2011 and 2015. Additionally, 42 percent say their financial situation has improved over the past two years, and nearly 58 percent believe their finances are heading in the right direction. However, the survey revealed some worrisome findings:
- 38 percent of employees live paycheck to paycheck;
- 39 percent of employees could not come up with $3,000 if an unexpected need arose within the next month;
- 18 percent of employees making more than $100,000 annually live paycheck to paycheck;
- 70 percent of employees are saving less for retirement than they think they should;
- 32 percent of employees have financial problems that negatively affect their lives; and
- 64 percent of employees believe their generation is likely to be much worse off in retirement than that of their parents.
“Financial health is not just about income. The impact of financial problems on employees’ health and stress, even for those who aren’t living paycheck to paycheck, is unmistakeable,” said Steve Nyce, senior economist at Willis Towers Watson. “Many employees are struggling with their financial situation even as the job market and economic conditions improve. Some employees struggle to pay for their basic needs, including health care, while others are falling behind in saving for retirement. No matter the source, financial stress has a negative impact on their lives, underscored by hampering their ability to perform effectively at work.”
Financial stress is having a negative effect on employee productivity, engagement and health. This is especially true among “struggling” employees, identified as those who live paycheck to paycheck and have difficulty controlling spending. About one-fourth (27 percent) of respondents are classified as struggling. Among struggling employees, 39 percent said money concerns keep them from doing their best at work. Roughly half of struggling employees (49 percent) reported suffering from stress, anxiety or depression over the past two years, compared with just 16 percent of employees without any financial worries. And only 39 percent of struggling employees were fully engaged at work.
Employers’ role in helping employees. The survey also found that providing employees with tools and resources can help boost their financial wellbeing. Seven in 10 employees (69 percent) who were given the most access to several tools and resources (four or more) said their finances are heading in the right direction versus just 51 percent who had no access to tools. Similarly, 66 percent of workers with the most access to financial management resources said these resources met their needs, compared to 39 percent with less access to resources. Nearly as many (64 percent) respondents with the most access said the resources encouraged them to improve their financial situation versus 40 percent with just some access to tools or resources.
“We believe, with the right actions and insights, employers can help lower the financial risks that workers face. Access to the appropriate benefits and decision tools is a great start. These employer resources should include supportive social connections, such as coworkers and family, all of which can help employees keep and enjoy more of their money and, ultimately, improve wellbeing,” concluded Shane Bartling, senior director at retirement at Willis Towers Watson.
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