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Despite economic uptick, many workers ‘struggling’

Employers can temper workers' financial challenges with tools to help them better manage their money.
By: | February 26, 2020 • 3 min read

With the stock market booming and unemployment rates remaining at record lows, the state of American employees’ financial wellbeing is, on balance, solid. Yet, according to a recent survey, many U.S. workers continue to live paycheck to paycheck, can’t control spending and remain concerned over their financial futures.

The 2019/2020 Global Benefits Attitudes Survey, from global advisory, broking and solutions company Willis Towers Watson, reports that fallout from these financial issues often lead to a broad set of negative outcomes for workers. The good news is the survey, which polled 8,000 U.S. employees, also found that employers that provide  financial tools and resources can help boost workers’ financial wellbeing.

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The survey found that 43% of U.S. workers are satisfied with their financial situation, a decent increase from 35% in 2017. In fact, employee satisfaction with finances has rebounded to levels last seen between 2011-2015. Additionally, 42% say their financial situation has improved over the past two years, and 58% believe their finances are heading in the right direction.

Those are the very promising numbers. A healthy number of survey participants, however, are not faring as well. For example:

  • 38% of employees live paycheck to paycheck (and 18% of employees making more than $100,000 annually report living paycheck to paycheck);
  • 39% of employees could not come up with $3,000 if an unexpected need arose within the next month;
  • 70% of employees are saving less for retirement than they think they should; and
  • 64% 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 unmistakable,” says Steve Nyce, senior economist at Willis Towers Watson. He explains that many employees are struggling even as the job market and economic conditions improve, with some having a tough time paying for basic needs, including healthcare, while others are falling behind in saving for retirement.

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“No matter the source, financial stress has a negative impact on their lives, underscored by hampering their ability to perform effectively at work,” Nyce says.

Financial stress, in fact, often hinders employee productivity, engagement and health. That’s especially true among “struggling” employees, identified in the survey as those who live paycheck to paycheck and have difficulty controlling spending. Twenty-seven percent of respondents are classified as struggling. Among struggling employees, 39% say money concerns keep them from doing their best at work. Forty-nine percent reported suffering from stress, anxiety or depression over the past two years, compared with just 16% of employees without any financial worries. Just 39% of struggling employees report being fully engaged at work.

Employers who step in to help can make a difference, according to Nyce. For instance, 69% of employees who received the most access to several (four or more) tools and resources report that their finances are heading in the right direction—versus just 51% who had no access to tools. Similarly, 66% of workers with the most access to financial-management resources say these resources met their needs, compared to 39% with less access to resources. Finally, 64% of respondents with the most access say the resources encouraged them to improve their financial situation, versus 40% with just some access to tools or resources.

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“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,” says Shane Bartling, senior director of retirement at Willis Towers Watson. “These employer resources should include supportive social connections, such as co-workers and family, all of which can help employees keep and enjoy more of their money and, ultimately, improve wellbeing.”

Financial-wellness benefits, including some mentioned here, will be discussed during the upcoming Health & Benefits Leadership Conference, which will be April 15-17 at the Aria Resort & Casino in Las Vegas. Learn more here.

Tom Starner is a freelance writer based in Philadelphia who has been covering the human resource space and all of its component processes for over two decades. He can be reached at hreletters@lrp.com.

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