- Research from PwC suggests companies need to offer a cohesive and holistic financial wellness program for their workforce.
- Personal finance is a major cause of stress and anxiety, particularly among Millennials, with 71% of Millennials saying finance-related stress has increased over the past year.
- Financial wellness means being stress free and achieving financial stability, and 1 in 4 employees believe their workplace should offer support for financial matters.
PwC recently published the results of its 2019 Employee Financial Wellness Survey, which found that despite a strong economy and joblessness at a 49-year low, employees are increasingly stressed due to financial matters. This yearโs survey showed โmore employees than ever admitting to being stressed about their finances.โ
In fact, the survey states that โthe number of employees stressed about their finances increased across all generations, particularly among Millennials. 71% of Millennials say that their stress level related to financial issues has increased over the last 12 months.โ
Because many employer programas are still ineffective in addressing the key financial challenges employees are facing, financial stress is on the rise. โWe foresee critical issues for organizations if the root causes of this financial stress are not addressed. While some studies show upwards of 80% of employers having a financial wellness program in place, our results show that a majority are still traditional retirement education and planning programs lacking focus on the key areas causing employee stress.โ
But, what exactly is financial wellness? According to surveyed employees, โfinancial wellness means being stress free and achieving financial stability.โ
Employees are aware that they need help with financial matters. The PwC survey found that when asked what employer benefit they donโt currently have that they would like to see added in the future, more than one in four respondents state a financial wellness benefit with access to unbiased counselors.ย
It pays off to have these programs as well. โMore employees are using the services their employers provide to assist them with personal finances — 71% of those with employer-provided services say theyโve used the benefit, and those numbers have increased in recent years.โย
However, only 24% of employees said their employer offers services to assist them with personal finances. Without effective financial wellness programs, employee anxiety will continue to mount. Though thereโs been a rise in digital financial tools that people can use, workers are looking for a financial wellness solution that balances the technology and human aspect in order to deliver the motivation employees need to achieve their goals.ย
More importantly, financial wellness programs need to be able to engage employees on a continuous basis, and not just when theyโve reached a crisis. Programs need to be focused on planning and prevention, โin addition to intervening when issues may be more severe and options more limited.โ
As it currently stands, PwC argues that only a minority of employees have access to a truly cohesive and holistic financial wellness program.ย
Whatโs Causing Financial Stress?
For starters, โfewer employees feel their compensation is keeping up with their cost of living,โ with only 37% saying it is. Debt and cash issues are also a key concern, with nearly half of all employees saying they โfind it difficult to meet household expenses on time each monthโ and employees across all generations carrying credit card balances.ย
Employees cited the following as their top financial concerns (in order from top to least concern):
- Not having enough emergency savings for unexpected expenses
- Not being able to retire when they want to
- Not being able to meet monthly expenses
- Not being able to keep up with debts
- Being laid off from work
- Losing their homes
- Not being able to pay for college.
An important issue to note is that โnearly one in five employees is providing support for parents or in-lawsโ and 42% of employees are providing financial support to their adult children (over 21 years old). Interestingly, nearly half of employees are willing to sacrifice their own financial wellbeing for their kids.ย
Needless to say, employees who provide financial support to parents, children, or in-laws โface additional debt and retirement challenges.โ
Personal and Professional Consequences
Concern for financial matters not only increases stress and anxiety, but it also has a negative effect on people at work. โEmployees admit that financial worries have impacted their health, relationships, productivity, and time away from work.โ
35% of employees report that issues with personal finances have been a distraction at work. โNearly half (49%) of those who are distracted by their finances at work say that they spend three hours or more at work each week thinking about or dealing with issues related to their personal finances.โ
With 1 in 4 employees believing their workplace should offer support for financial matters, itโs time more companies started offering a cohesive and holistic financial wellness program for their workforce.
