Rainy days are here: Employees need help weathering inflation-related financial stress

Savings accounts are tight right now – and according to new research from Fidelity, that can have a serious impact on employees. According to their data, more than half (52%) of employees say they’re overwhelmed by their own lack of emergency savings.

Related: Workers are financially stressed (and employers have an essential role to play)

While financial advisors generally recommend employees keep 3-6 months’ worth of expenses in an emergency savings account, half of workers have yet to reach this figure, and almost 1 in four haven’t yet saved one month’s worth of expenses, the data found.

This can affect employees’ work, as employees who are financially well are 10 times as likely to be focused while on the job. Moreover, having sufficient short-term savings increases employee confidence and financial wellness, and keeps them on track for a healthy retirement, the report said. So what can employers do to help employees? The Fidelity report offers a few suggestions. First, employers can offer an emergency savings program, which is especially useful when it offers matching contributions and payroll integration.

Employers can also encourage employees to start with smaller sums in their emergency savings, then slowly build them up. This can make the process of saving seem more manageable, the report suggests.

Emily Kolle, the vice president of Product Management at Fidelity Investments, commented on the findings in an email, saying that as Americans are increasingly looking for assistance in building their emergency savings, employers are uniquely positioned to help by working with benefits providers like Fidelity to offer workplace emergency savings options.

“My Starbucks Savings is a great example of programs companies can offer to incentivize employees to secure a path to achieving their emergency savings goals. Fidelity is pleased to work with Starbucks and other companies to offer a Fidelity solution that helps employees keep their emergency funds accessible, so they are available when needed. Today, thousands of employees utilize a Fidelity solution, commonly known as Fidelity Goal Booster, to help with short-term savings goals such as emergency savings, buying a first home or even starting a family. By taking advantage of Goal Booster, employers can work with a trusted provider to offer a tested and proven short-term savings experience for their employees,” Kolle said.

Other tips from the study include:

• Encourage employees to make minimum debt payments.
• Encourage employees to contribute to their retirement account so that they can achieve a full employer match on funds.
• Be strategic about what debt you pay off and what you invest based on the interest rate on each account.
• Eventually, once employees have saved enough in their emergency accounts, help them find and work towards other saving goals.