- 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 year’s survey showed “more employees than ever admitting to being stressed about their finances.”
In fact, the survey states that “the 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.”
Because many employer programas are still ineffective in addressing the key financial challenges employees are facing, financial stress is on the rise. “We 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.”
But, what exactly is financial wellness? According to surveyed employees, “financial wellness means being stress free and achieving financial stability.”
Employees are aware that they need help with financial matters. The PwC survey found that when asked what employer benefit they don’t 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.
It pays off to have these programs as well. “More employees are using the services their employers provide to assist them with personal finances — 71% of those with employer-provided services say they’ve used the benefit, and those numbers have increased in recent years.”
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 there’s 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.
More importantly, financial wellness programs need to be able to engage employees on a continuous basis, and not just when they’ve reached a crisis. Programs need to be focused on planning and prevention, “in addition to intervening when issues may be more severe and options more limited.”
As it currently stands, PwC argues that only a minority of employees have access to a truly cohesive and holistic financial wellness program.
What’s Causing Financial Stress?
For starters, “fewer employees feel their compensation is keeping up with their cost of living,” with only 37% saying it is. Debt and cash issues are also a key concern, with nearly half of all employees saying they “find it difficult to meet household expenses on time each month” and employees across all generations carrying credit card balances.
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 “nearly one in five employees is providing support for parents or in-laws” 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.
Needless to say, employees who provide financial support to parents, children, or in-laws “face additional debt and retirement challenges.”
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. “Employees admit that financial worries have impacted their health, relationships, productivity, and time away from work.”
35% of employees report that issues with personal finances have been a distraction at work. “Nearly 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.”
With 1 in 4 employees believing their workplace should offer support for financial matters, it’s time more companies started offering a cohesive and holistic financial wellness program for their workforce.