Because of the economic impacts related to inflation and/or concerns about a recession, 62% of employees report that they’ve needed to reduce contributions to their savings, with nearly a third (31%) reducing contributions to their 401k plans.
That’s a key finding from the latest research released today from Morgan Stanley at Work’s second annual State of the Workplace Financial Benefits Study, highlighting the economic challenges employees face amid high inflation and evolving views on financial wellness and retirement benefits.
More than a quarter of those surveyed (26%) said they were scaling back on paying off their debts and loans. Gen Z (74%) and Millennials (68%) were more likely to have made these reductions than their Baby Boomer counterparts (37%).
Employees citing money-related stress as a performance inhibitor increased year over year as well. Nearly 3 in 4 employees (71%) report that money-related stress negatively affects their work and personal lives, up 7% (from 64%) in 2021. Among age groups, Millennials (77%) would be most likely to say financial stress is negatively impacting their work and personal lives, up from 69% the previous year.
Many are struggling in silence, with nearly half (47%) of employees reporting that they have either never thought to reach out or are unsure if they are allowed to reach out to their employer for assistance with their personal finances.
The research also found that human resources professionals and employees alike strongly agree that providing access to a financial professional for retirement planning assistance is a top priority. More than 3 in 4 HR pros cited this support as a top or high priority, while 93% of employees also view retirement planning assistance as a priority when choosing where to work.
“One often-overlooked resource that can change the game, especially in today’s environment, is the financial advisor available through your workplace retirement plan—who can help participants reach financial goals.”
Anthony Bunnell, Morgan Stanley at Work
“Employees are looking to their employers for the resources and support they need to navigate personal financial challenges—challenges that have a real impact on their professional and personal success, both day to day and long-term,” said Krystal Barker Buissereth, Head of Financial Wellness at Morgan Stanley at Work. “Especially in the face of today’s high inflation and market uncertainty, we are seeing that smart and accessible workplace benefits like Financial Wellness can be a lighthouse for employees to find helpful tools, financial education, and professional guidance.”
When asked what type of retirement planning would be most beneficial to them, employees identified access to a Financial Advisor as their top choice, with 52%. However, HR professionals list goals-based retirement investment planning as employees’ top priority (47%), followed by access to retirement planning tools and calculators (43%), and tied for third, access to a Financial Advisor (40%) and retirement planning workshops (40%).
“The data makes it clear that employees are struggling to find a balance between long-term savings and immediate needs,” said Anthony Bunnell, Head of Retirement at Morgan Stanley at Work. “One often-overlooked resource that can change the game, especially in today’s environment, is the financial advisor available through your workplace retirement plan—who can help participants reach financial goals.”
Additional details are available in Morgan Stanley at Work’s State of the Workplace Study, available here. As part of a series of findings from Morgan Stanley at Work’s second annual study, the business published its findings on financial benefits and will also publish its findings on equity compensation in the coming weeks.
SEE ALSO:
• Despite Volatility, Average 401k Contribution Rates Remain Stable
• Employees More Focused on Financial Benefits This Year
• ‘Corporate Retirement Portal’ Debuts from Morgan Stanley at Work