Eight in 10 employers say their employees are struggling financially as they face persistent problems such as saving for retirement, paying down debt and dealing with medical expenses, to name a few, according to new research from MassMutual.
The 2019 MassMutual Workplace Financial Wellness Study finds that 79% of employers say their workers are struggling financially.
The larger the employer, the more likely respondents are to express concern about employee financial wellness issues.
“Our research finds that financial wellness issues are coming to roost at the workplace and that employers are acutely aware of their employees’ financial struggles,” Ken Verzella, Head of Financial Wellness for MassMutual, said in a statement. “As long as workers struggle to overcome shorter-term financial issues such as eliminating debt and building emergency funds, they will be unable to save in any meaningful way for retirement and other long-term financial needs.”
Widespread worries
Employer estimates vary about how many employees are plagued with financial problems.
However, half of employers estimate that at least 25% or more of their workers struggle financially and 15% of employers say at least half of their workers are plagued by financial woes, the survey finds.
Proof points for financial struggles include managers’ conversations with employees, their lack of participation in retirement plans, working second jobs, taking loans from retirement plans, asking for paycheck advances and other indicators.
The most prevalent employee financial problems cited by employers include credit card or other consumer debt, day-to-day expenses for housing and childcare, the inability to save and prepare for retirement, a lack of emergency savings, and high medical costs, according to the study.
In addition, employers expressed greater concern about some financial struggles than others.
Different sizes, different concerns
The specific financial issues plaguing employees seem to differ with the size of the employer.
Larger employers are more likely to point to employees failing to participate in their employer-sponsored retirement plan or, if they do participate, withdrawing funds from their plan, the study finds.
A call for help
A majority of employers (57%) report that workers are seeking help with their personal financial problems from employers, according to the study. Another 17% of employers say they are unsure if employees want help through work.
Again, the larger the employer, the more likely the company is to report that employees are seeking help, the study finds.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
