As the economic situation for us all continues to be worrisome, with inflation rates hitting highs of our lifetime and gas prices doing the same it’s fair to assume stress has become almost a common place in our daily routine. For those who are in financial distress, experiencing bad debt or uncertainty on how to save or borrow these levels of stress are becoming a much more dominant part of life, especially while at work.
In almost all of the recent studies on employee financial wellness, lack of financial literacy, savings and credit card debt have consistently been the top financial concern of employees.
When all of these studies are looking at holistically, 4 areas of concern from regarding the lack in financial wellness have clearly made themselves evident trends.
1. Employees need and want help even if they won't ask for it.
In aggregate, over 90% of employees have given feedback that they want their employers to provide financial wellness programs and over 70% feel that access to a financial wellness program would make them more likely to remain long term with their current employer. 2. Bad debt is the most common issue distributed through all employee cohorts.
Studies are showing that of those who reporting financial un-wellness as a check mark on their personal financial wellness profile, over 87% are doing so because of have major debt issues. 73% have households that earn less than $50,000 a year and 72% are younger than 36 years old.
3. The Debt issue will not be solved overnight. The studies are consistently showing that a large number of participants not only have outstanding loans such as student debt but that they also have accompanying credit card debt. In fact, credit card debt is the number one concern for people under 36 years old, even above their additional student debt. In the older demographic there has also been a 10% increase in respondents who felt unsure of when they will retire now due to increasing debt levels over the last few years.
4. Financial wellness is a 2 sided problem.
Financial literacy is a cause and effect problem effecting employees and employers alike. One single example of the effect of debt for employees is productivity levels at work. Almost half of all employees in the total workforce surveyed to date claim they would be more productive if they didn’t have to worry about their personal finances. It's estimated that the cost in financial stress per employee per year is approximately $3,000 in lost productivity. A few years ago this same statistic was well below $2,000 per employee.
The current environment is unlikely to change much in the coming year and some say it could indeed continue to get worse. This economic uncertainty alone is enough of a compelling reasons for employers to add more robust financial wellness programs to their employee benefit plans. The signals out there are clear and data driven. To do nothing about this issue will likely cause many businesses to experience significant downturns in their production and profitability. Only time will tell which of those are wise enough to act now before it's too late.