?It’s no surprise that employees are financially stressed right now.
High inflation, the impact of the pandemic, and turmoil in the technology and financial sectors have left many employees concerned about both their job security and their economic stability.
HR executives are on the front lines of responding to these challenges. They’re often the ones employees turn to first for support when they’re under financial pressure. Many HR teams have responded by offering financial wellness benefits to support employees during tough economic times. But HR leaders are struggling just as much as, if not more than, other employees when it comes to handling their personal finances.
A 2023 survey by financial wellness benefit provider BrightPlan of 1,400 knowledge workers at large U.S. companies found that 77 percent of HR executives report experiencing financial stress. Neha Mirchandani, BrightPlan’s chief marketing officer and head of people, said that only 5 percent of HR leaders answered financial literacy questions correctly in the survey, compared to 18 percent of all respondents. In addition, nearly 62 percent of HR leaders said they had unmanageable levels of debt.
“This study really puts a spotlight on the fact that financial stress has a huge impact on the other aspects of well-being,” Mirchandani told SHRM Online. “Employers really need to be looking at and focusing on all of those aspects of well-being.”
Deanna Allison, director of benefits, well-being and financial programs at financial services company Bread Financial, told SHRM Online that this data reflects her experience with her own team.
HR professionals are often responsible for communicating financial wellness benefits to their teams but sometimes forget the content is also for them, she said. They’re more focused on making sure employees know about the benefits.
“They’re the people in charge of the production, so it’s hard to enjoy the show,” Allison said. “We take for granted that they don’t see the full content that our average associate would see.”
HR Professionals Have Increasing Workloads
The past few years have been particularly tumultuous for HR teams. Between managing fully remote workforces and developing COVID-19 health and safety practices, many HR departments were already feeling squeezed.
In 2021, roughly 60 percent of HR leaders reported an increase in their workload during the pandemic, according to research from accounting consultancy Sage. Meanwhile, inflation has remained stubbornly high, increasing the prices of household essentials such as groceries and gas.
Together, these factors have created a perfect storm for financial stress.
“We have inflation rates that are still at all-time highs, although they are moderating a little bit,” said Barrett Scruggs, vice president of workplace financial well-being at SoFi at Work, a financial wellness benefit provider. “That’s having a massive impact on household finances. The number of people who report doing financially OK is the lowest it’s been since 2016.”
HR leaders are facing a particularly difficult task because they have to support employees during tough economic conditions, while they deal with the same challenges themselves, Scruggs said.
“They deal with a lot of the problems within the company internally. That includes filling open positions in a very tight labor market,” he said. “I’m not entirely sure that their financial stress is any different. It’s the general job stress that is compounding the issue for them.”
Supporting HR Teams’ Financial Well-Being
Financial wellness benefits are one way employers can support financial well-being for all employees—including ones in HR—in addition to more standard strategies, such as increasing salaries. But most companies aren’t investing in these benefits.
In a SHRM study from 2021, 74 percent of HR professionals said their companies were not adding new benefits to support workers’ financial wellness.
BrightPlan’s Mirchandani said companies often view financial wellness benefits as a cost, so they are often the first to go when budgets are slashed. In fact, recent research from Morgan Stanley at Work, which surveyed 1,000 U.S.-employed adults and 600 HR leaders, found that despite employees valuing financial benefits more than ever, one in four HR leaders said their organizations are cutting back on these benefits to prepare for a possible recession.
But Mirchandani said this may be shortsighted, since these benefits can make a big difference for employers by reducing employee turnover and absenteeism.
“It’s the right thing to do for your people, but it’s also the right thing to do for your business,” she said.
There are also other ways to help employees with their finances. Employers should consider adding benefits to support workers in retirement, such as a 401(k) plan with a match, or tools that help workers save for health care, such as health savings accounts, Allison said. Access to financial advisors can also be useful.
At companies that still offer financial wellness benefits, HR executives can do a better job communicating about them to their teams, Allison said. In some cases, HR professionals may be embarrassed if they don’t understand the financial wellness tools their employer offers and could therefore be afraid to ask for help.
“They tend to serve first and think of themselves last,” she said. “You tend to hear that guilt: ‘I should be better at this.'”
Ultimately, education is the most important tool employers have, Scruggs said. HR executives should focus on educating their own teams, as well as the broader company, on how to be financially smart.
“I think there’s room to improve with these financial benefits programs,” he said. “Education is where it starts. It’s then connecting employees to the right products. It’s not enough just to educate the employee; the big step after that is connecting them to the right resources.”
Caroline Hroncich is a freelance writer based in New York City.
