Emergency savings accounts: The must-have benefit that incentivizes workers to stay
With 3 out of 4 workers living paycheck to paycheck, 80% of them are likely to stay with their employer if they offered an emergency savings account, according to a new FinFit survey.
Financial stress creates a plethora of negatives that affect the U.S. workforce, including lower productivity, increased absenteeism and greater carelessness.
A new survey from FinFit and HR Dive’s studioID revealed the reality for many U.S. workers. The “Inside the Wallets of Working Americans” report examines why three out of four workers are living paycheck to paycheck. Financial stress was consistent in the data:
- 60% of respondents feel stress when thinking about their finances
- 38% of respondents have taken days off work to deal with personal finance issues
“Employers need to think about how to solve this problem,” explained FinFit Chief Commercial Officer Michael Woodhead. “Workers who are stressed aren’t as productive because they cannot focus on the minute-to-minute and day-to-day activities that are required for them to execute their job.”
Workers are looking for ways to improve their finances, with paying off debt being the most popular change desired by the workforce. Accruing emergency savings and saving for retirement were also important financial milestones for many respondents.
As workers fight to make ends meet, their long-term goals suffer. Many are forced to borrow money to pay for household bills and expenses. More than two-thirds of workers said they do not know whether their savings will suffice for them once they retire. As a result, many feel worried about the state of their retirement savings.
Survey respondents expressed strong interest in employee benefits designed to help them save money and pay down debt. In addition, workers would be more enticed to:
- Stay at their company – 80%
- Recommend their company as an employer – 78%
- Be engaged in their work – 65%
Related: 30% of younger generations worry about finances, study finds
These findings support the increased demand for financial tools, like emergency savings plans, for workers. While employer-provided financial benefits have existed for decades, data shows that they have failed to accurately support their workers’ needs. Employees need tools that address their pain points: their growing debt, their lack of emergency funds and their slow-growing savings.