Throughout 2016, newspapers and magazines documented Americans beset by financial concerns. “Evidently, Americans are having a difficult time with their finances. Whatever its cause, their financial insecurity and growing awareness of just how great their insecurity is—inability to cover even a $400 emergency—has created a level of financial stress that is impacting all areas of their lives—which is why we see 2017 being the year of financial wellness,” said Carla Dearing, CEO of SUM180—an online financial wellness service.
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More than half (52%) of respondents to PricewaterhouseCooper’s 2016 Employee Financial Wellness Survey say they are stressed about their finances; 45% reported an increase in stress over the last 12 months. Responses from 1,600 full-time employees reveal financial stress impacting overall wellbeing:
- Health (28%)
- Relationships at home (23%)
- Productivity at work (17%)
- Attendance at work (8%)
The leading causes of their financial stress:
- Not having enough emergency savings for unexpected expenses (55%)
- Not being able to retire when I want to (37%)
- Not being able to meet monthly expenses (25%)
Further, respondents reported:
- Personal finances are a distraction at work (28%)
- Financial stress impacts my productivity at work (17%)
- I spend 3 or more hours during the work week dealing with/thinking about financial issues (46%)
“The benefits to employers of addressing employee financial stress are significant. Financial wellness programs drive engagement, productivity, and success by as much as $400 per employee. Financial wellness programs also engender increased loyalty and connection, and can positively impact as many as 50% of employees,” Dearing said, in a press release announcing the findings.
“Still, employers debate whether they should get involved in their employees’ finances. Financial health is a major component of employee wellness. If employers say they’re concerned about their employees’ wellness, they can’t ignore their role in helping employees improve their financial health,” Dearing continued. “That said, employers are concerned about where to draw the line on privacy and the effectiveness of financial wellness programs. Will the program they choose help employees improve their financial health? Will the improvements be sustainable?”
The data suggests employers are increasingly providing some form of financial wellness offering to their employees. According to a report from Aon Hewitt, more than half (55%) of employers are now offering some form of financial wellness program to their employees.
Employers’ reasons for offering financial wellness programs (according to the Aon Hewitt report):
- It’s the right thing to do (85%)
- Increase employee engagement (80%)
- Improve retirement statistics (58%)
- Decrease employee time spent addressing financial issues (44%)
- Employees asking for financial wellness programs (33%)
- Decrease medical costs (24%)
- Other (e.g., educate, help employees) (4%)
“The data is in. It’s clear to us that employer-provided financial wellness programs are a win for employees and employers—provided they adequately address the ever-relevant issues of any employer-provided program: privacy and efficacy. There is no doubt in our minds that 2017 will be the year of financial wellness,” Dearing concluded.