SoFi found that employees have high levels of financial stress
Employees are on shaky ground when it comes to their finances.
A new survey from financial services provider SoFi and HR research consultancy Workplace Intelligence has found that 51% of employees are more stressed about their finances today than they were at the height of the pandemic, and spend about 25% of their working week deal with financial problems.
Top sources of financial stress for employees include lack of money for retirement, credit card debt and difficulty paying basic expenses like rent, mortgage or food, according to the survey. And while 80% of HR leaders say they want to do more to help employees, 45% of employees say they feel their company doesn’t care about managing these stressors.
Read more: Assist employees with their financial needs
“Offering financial wellness benefits isn’t just the right thing to do, it’s also a critical way to boost employee engagement and productivity,” said Dan Schawbel, managing partner at Workplace. Intelligence, in a press release. “But people’s preferences are changing rapidly, and the companies that can adapt quickly are the ones that will win the war for talent.”
The impact has both short-term and long-term effects on an employee’s well-being – 86% of employees say their financial stress impacts their productivity and 84% say it affects their job satisfaction. Eighty percent say financial difficulties have a negative impact on their mental and physical health.
In the long term, more than a third of employees plan to postpone their retirement dates six years in order to be more financially stable. However, some employees are motivated to take control now: About 40% of employees want to prioritize retirement savings in 2022, according to the report.
Read more: If you cashed out your retirement plan during COVID, here’s how to rebuild
But employees don’t think they can do it alone: Half of survey respondents admitted they don’t know what to do to make progress on their financial goals, SoFi found. And while 98% of HR managers believe it is their responsibility to help employees improve their financial situation, only 49% of employees believe they have learned about finance benefits offered by employers.
“The simple fact is that the more you save and set aside, the more you will make up for the loss you have suffered during the pandemic,” says Denny Artache, a certified financial planner who notes that employers need to improve financial education around concepts basics like budgeting and emergency funds. .. “The problem is that it’s not a miracle solution. Like diet and exercise, you should systematically reduce your expenses, have a budget and stick to it.
SoFi found that 64% of employees would like an employer provided emergency savings fund benefit, and 64% would like a 401(k) matching program to help meet their financial needs. Sixty-two percent would like more education on personal finance and budgeting.
Artache recommends that employers engage a third party to provide financial education, through lunch and learn sessions and other engagement strategies. A financial planner can help employees prioritize and build a plan beyond just meeting their immediate financial needs.
“You need to see the big picture: your investments, your health, your mental fitness,” he says. “If you don’t, you’ll tend to want to take shortcuts instead of doing what you really need to do to achieve your goals.”