A new Mercer report about employee financial stress also revealed some interesting findings concerning what workers think about–and want most from–their 401(k)s.
The research shows employees are more focused on their financial security and well-being right now than climbing the ladder or career advancement. According to Mercer’s 2022 Inside Employees’ Minds study, the number of employees who are considering leaving their employer has increased to 36% compared to 28% in 2021, with low-income (those who make less than $60k per year), frontline (healthcare, retail, hospitality, etc.), and underrepresented employees being more likely to consider leaving than other groups.
The findings also show significant declines in employee satisfaction and commitment across the board since last year, most noticeably in compensation, benefits, and career goals.
Regarding retirement plans specifically, the research found three things employees are looking for help with from plan sponsors. First off is that fewer than half of respondents feel confident they can turn their retirement savings into a steady income to last the rest of their life, indicating they want help in doing so.
When asked what changes they would value most in retirement benefits, employees overall chose an increase in the contribution amount matched by their employer. And third, employees under 45, who are less likely to have discretionary income to contribute to their retirement plan, would value matching payments made to student loan debt and contributions to a health savings account (HSA).
The purpose of the survey was to understand the root causes of high turnover and how employees’ needs and wants have shifted over the past year since the term “Great Resignation” was coined in May 2021. The findings reveal that, among all demographics, concerns over inflation have placed financial health as the greatest unmet need—covering monthly expenses now claims the top spot, up from No. 9 in 2021. The ability to retire is now the second top concern amongst all demographics, up from No. 5 in 2021.
Third on the list is work-life balance and boundaries – employees continue to say burnout is a key reason for them to consider leaving their employer. More than half (51%) of employees reported feeling exhausted on a typical day at work.
“It’s clear now more than ever that employees are prioritizing their well-being now. The top three reasons employees consider leaving their employer are pay and benefits, burnout due to workload, and insufficient healthcare benefits,” said Adam Pressman, Mercer’s US Employee Research Leader. “For some, especially front-line and low-income employees, that means financial survival. Others, who have their basic financial needs met, are placing increased importance on their lives outside of work.”
Financial concerns remain high even for high-income earners—71% of employees who make more than $200,000 per year say that high inflation and market volatility have increased their financial stress. Overall, nearly 2 out of 3 employees (62%) say they’ve reduced spending, and a third say they’ve reduced savings or tapped into savings to supplement their spending needs.
SEE ALSO:
• Retirement Anxiety Keeping Even Wealthy Up at Night
• Young Workers: 401k Not the Only Way
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
