Is every day "Take Your Financial Worries to Work Day" for your employees?
87 percent of employers characterize their employees’ financial wellness as good or excellent, even though they say requests for pay advances have increased.
U.S. employers can assume that eight in 10 of their workers have experienced at least one unexpected financial need in the past 12 months. “In a global pandemic, it’s shocking that so many CEOs and HR leaders think their employees are in excellent financial health,” said Matt Pierce, founder and CEO of the financial wellness company Immediate. “They have a much bigger problem than they’re aware of.”
Households across all income levels have been hit with unprecedented financial stress during the pandemic. The impact is being felt in the workplace, making workers less effective, with potentially dire outcomes — especially in industries such as health care, where mistakes can be fatal.
A survey of 1,250 employees by Immediate looked at the ongoing impact in the workplace of heightened financial stress. Among the findings:
Three-quarters of employees experienced at least one unexpected cost of $400 or more, with 19 percent saying their most expensive obligation cost them more than $800.
Only 38 percent say they were able to cover at least one of their unexpected expenses out of pocket. The majority had to resort to potentially detrimental measures to settle the expense, such as charging it to a credit card, borrowing money from family or friends, or taking out a high-interest loan.
Three-quarters of employees surveyed feel concerned about their financial stability in 2021, while a third are very concerned.
Nearly 60 percent of employees who consider themselves “very concerned” with their financial stability in 2021 are part of households that make more than $75,000 a year, with nearly 50 percent of those earning $100,000 or more.
More than 75 percent of employees report that their financial struggles negatively affect their physical health, while 80 percent say they negatively affect their mental health.
More than a quarter of employees would delay medical care if faced with an unexpected medical cost.
“Employers have overestimated the financial health of their employees, resulting in two in five failing to offer any form of financial wellness tools or benefits,” according to the survey report.
“Employees who are stressed, distracted and sick will ultimately impact employers’ bottom lines. These issues will hit the employer with direct medical costs, as well as less- productive workers.”
Furthermore, there is a disconnect between how employers view their employees’ financial wellness and reality. Eighty-seven percent of employers characterize their employees’ financial wellness as good or excellent, even though they admit that requests for pay advances have increased during the pandemic.
Fewer employees characterize their financial wellness as positive, with only 62 percent saying it’s good or excellent.
Despite their concern, 40 percent of employers say they do not currently offer financial wellness tools to employees. Ninety-seven percent of employers believe their company could offer additional tools to help employees manage their financial wellness, and employees agree — 88 percent believe their employers could offer more in this area.
When it comes to the top HR challenge for employers, offering a competitive compensation package beats employee safety, despite the pandemic. This may be one reason why two in five employers say it’s taking longer to fill open positions, and about a third say it’s more competitive to hire talent.
In addition, more than a quarter say they’re spending more on hiring through paid advertisements, sign-on bonuses and using the services of talent agencies.
Looking ahead to 2021, almost half of HR leaders say offering competitive benefits will continue to be one of their top three challenges. The large majority of employers (90 percent) plan to offer or add benefits in 2021 to meet employees’ needs.
“These unprecedented times are producing employees that are vulnerable and in need of help,” said Mason Beard, chief strategy officer for Immediate. “It’s an opportunity for employers, by answering that call, to engender gratitude and therefore strengthen employee loyalty. Loyal employees are a vital ingredient for thriving businesses.”
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