?Workers are stressed, and money worries are a big reason for their sleepless nights and lowered mental health. Employees are increasingly looking to their employer for guidance to help them cope with the financial strain they’re feeling.
In fact, while 83 percent of the 2,840 benefits decision-makers surveyed in MetLife’s annual benefits report said they think their employees are financially healthy, only 55 percent of the 2,884 full-time employees in the report said this was the case.
Inflation, a higher cost of living and debt were the top causes that workers across all groups cited as contributors to their low financial health. Among MetLife’s findings:
- 55 percent of workers said they are living paycheck to paycheck.
- 55 percent said they are in control of their finances; that’s down from 61 percent in 2022.
- 52 percent said they don’t have a three-month savings cushion; that’s down from 62 percent in 2022.
Nearly half (48 percent) of the employees surveyed by MetLife cited financial concerns—up from 31 percent in 2022—as the cause of their poorer mental health.
PwC’s survey of 3,638 full-time U.S. employees found that financial stress negatively impacted workers’ sleep (56 percent), mental health (55 percent), physical health (44 percent) and relationships at home (50 percent).
Stress over personal finances is a global issue, according to a Nudge survey of more than 1,500 people and 34 global HR and benefits leaders in 46 countries. Nudge is a global financial education provider based in London.
“Half of global employees are anxious about their personal finances, as well as the state of their country’s economy,” according to Nudge’s 2023 global financial well-being report. “People are looking for answers, and they’re turning to their employers for help.”
Financial Counseling
“The vast majority of employees want help with their finances,” PwC said in its report, noting the importance of access “to trustworthy, objective resources that aren’t capitalizing on product sales or retirement plan rollovers.”
However, only 27 percent of employers in Nudge’s survey provide financial counseling; 47 percent offer financial education, and 32 percent offer financial advice.
Employees are less likely today to be embarrassed to ask for financial guidance or advice. In the PwC survey, only 33 percent indicated they would be embarrassed to seek such advice, compared to 42 percent in 2019. Personalizing financial wellness benefits to employees’ life and career stages is among the employer strategies the PwC report suggests.
Offering financial resources and mentoring is something Asim Hafeez, owner and operator of Empower Energy Solutions in Darien, Conn., does on an informal basis for his 35 full-time employees.
Hafeez brings in speakers to talk on various financial topics and points workers to a variety of books, courses and other resources. The entrepreneur achieved financial independence—what he calls “job-optional status”—in his 20s. He often serves as a sounding board for employees who are weighing various financial decisions, and helps them break down large financial aims into bite-size goals. A recurring topic employees raise with him is how they can retire early.
“People have money coming in, but they need to play good defense with what they have,” Hafeez said. That includes learning how to budget; setting small, realistic goals they can build upon; and eschewing consumerism.
The financial strain employees experience is “almost always because of [poor] financial habits and tendencies,” Hafeez pointed out. His organization celebrates employees’ financial wins, he added, whether it’s when someone buys their first house or contributes the allowable maximum to their Roth individual retirement account for the sixth consecutive year.
Financial Responsibility Self-Care
Financial coaching and mentoring practices have emerged over the last 10 years, said Craig Rubino, head of participant insights, financial wellness and learning at Morgan Stanley at Work.
More recently, though, employers have been taking into account how financial stress—such as worries over a spouse’s unemployment, managing retirement accounts or uneasiness over a potential recession—negatively affects workers’ personal and work lives.
“That level of stress is what is driving the need for us to focus on financial responsibility self-care,” Rubino said. “Living within tight budgets can lead to feelings of deprivation. It can take a toll on [workers’] well-being and productivity.”
A third-party finance coach can help an individual talk to family members about reducing unnecessary expenses, aid in creating a budget, and insure the employee is taking advantage of cost-cutting benefits such as employee discounts, transit benefits or a health savings account.
There are four main topics a financial coach or counselor can address, Rubino said:
- The individual’s budget.
- Ways to reduce expenses.
- Tools that best fit an individual’s financial needs—whether a mobile app, online tracking tools or traditional spreadsheets—and help in developing a habit of using those tools.
- Tools to manage self-care so that employees can approach their finances with more mindfulness and reduced stress.
Companies that are most successful with financial counseling benefits listen to their employees, Rubino said. One approach is survey employees to understand key financial stressors and needs, and then use the data to prioritize the benefits employees most want.
Financial stressors differ among some demographic groups, MetLife found. Older employees and men were more likely to cite insufficient retirement savings as top financial stressors. For women, top concerns were about their ability to save for a major purchase such as a car, college or house, and being able to cover out-of-pocket medical expenses such as premiums, deductibles and co-pays that have increased over last year.
Other SHRM Resources:
Employers Step Up with Emergency Savings Accounts, SHRM Online, July 5, 2023.
As Employees Prioritize Financial Benefits, Some Employers Cut Back, SHRM Online, May 26, 2023.
