Another head-shaking survey making a case for employers to provide financial wellness programs for an all-too-big percentage of employees in productivity-sapping financial distress came out this week.
While it boggles the mind that anyone making $160,000 a year still lives paycheck-to-paycheck, those people are apparently out there (probably holding the latest iPhone), and four in 10 people making more than $100,000 per year are considered “financially unstable.” They’re stressed out about it, and that stress is hurting their employers, too.
In fact, American businesses are losing $500 billion per year due to employees’ personal financial stress, according to a new survey of more than 10,000 Americans by Salary Finance.
Nearly one in two U.S. employees are worried about money, leading to depression, panic attacks, sleepless nights and distractions at work; this lost productivity comprises 2.5% of the U.S. GDP.
Notable survey insights include:
- Americans of all ages worry more about finances than their health, careers or relationships. While 48% of all employees are worried about finances, the relationship between money and job title is surprising. Financial worries decrease as seniority increases until the department head level, then increase back to early career anxieties at the C-level.
- Most American employees feel limited by their finances. Only 6% of U.S. employees feel that finances are not a lifestyle constraint. Even among employees with more than three months’ savings for unexpected expenses, one in three is still worried about making ends meet.
- Employees’ financial stress costs companies. Financially stressed employees lose nearly one month (23–31 days) of productive work days per year and are 2.2 times more likely to seek a new job opportunity. Lost productivity, turnover and other factors directly related to poor financial wellness cost the average company between 11-14% of their total payroll expense.
- Financial stress has a significant impact on mental health, productivity, sleep and personal relationships. Specifically, employees with money worries are:
- 3.4 times more likely to suffer from anxiety and panic attacks and 4 times more likely to suffer from depression
- 5.8 times more likely not to be able to finish daily tasks and 4.9 times more likely to have lower work quality
- 8 times more likely to have sleepless nights
- 4.5 times more likely to have poor relationships with colleagues
- Income is not an indicator of financial wellness. According to the survey, 34% of U.S. employees are without savings and regularly live paycheck-to-paycheck; of these, one in four earns more than $160,000. Approximately 40% of people making more than $100,000 per year are financially unstable, with less than three months’ savings.
“Historically, employers have viewed employees’ personal finances as none of their concern, but American companies can’t afford to continue to turn a blind eye to their employees’ financial wellness,” said Salary Finance CEO and co-founder,Asesh Sarkar. “The connection between financial and mental wellness can deteriorate if solutions are not readily made available to those struggling. Ignoring the impact of financial problems on workplace wellness will only continue to perpetuate this loop.”
This financial wellness survey comes on the heels of Salary Finance’s recent report about American households’ ability to take on financial stress and pay day-to-day bills following potential financial setbacks.
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.
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