Employee Financial Stress: How Employers Can Help and Improve Their Bottom Line
In a 2017 report by PricewaterhouseCoopers
(PwC), a survey of 1,600 workers found that 53% are feeling financial stress, which results in negative impacts that impose costs in the form of less productive employees who may take more time off to deal with financial matters. Additionally, financially stressed employees tend to leave employers for higher pay and to cite health issues caused by financial stress.
According to the PwC study, employees reporting financial stress tend to be younger, with 35% of Millennials and 44% of Gen Xers saying they are financially stressed, versus only 21% of Baby Boomers. Women are more likely to feel financial stress, with 59% of females reporting financial stress versus 41% of men.
The survey also revealed that 54% of people feeling financial stress are twice as likely to postpone their retirement, and even 30% of those not feeling financial stress are planning to postpone retirement. Postponing retirement will, of course, cost the employer more in real budget dollars when long-term employees continue to work. Not only do long-term employees earn more in salary than newly hired employees, but an older work force also will tend to increase health care costs for the employer.
PwC estimates that an employer with 10,000 workers is losing $3.3 million per year in lost productivity due to employee financial stress. The report points out that this problem “may help justify an investment in a financial wellness program to change everyday behaviors and have lasting effects.”
Employers can help reduce the impacts of lost productivity by offering a comprehensive employee financial wellness program. The PcW report emphasizes that “one-on-one personal coaching” is the most desired way for employees to receive education and guidance. Thus, access to an experienced financial professional for face-to-face meetings with employees is an important component of any financial education program.
Richard Ford is Senior Vice President and Chief Marketing Officer, PlanMember Services.