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It probably won’t come as a shock to anyone who’s been paying attention to economic trends in the 2020s: The biggest cause of stress among employees across industries and job titles is related to finances and money. Almost two-thirds of Americans (63%) couldn’t cover a $500 emergency expense using savings, according to Bankrate, and the resulting lack of focus and attention at work (dubbed “presenteeism”) costs employers 10 times as much as employee absenteeism from work.
When prices for basic goods and services keep rising and pushing up stress levels while they grow, employers might feel like there’s only so much they can do to alleviate the situation. Wage increases are an important step, but they’re just one piece of the puzzle. Financial wellness and peace-of-mind can be more accessible for thousands of people, saving their employers millions and possibly billions of dollars — if those employers know how to effectively and efficiently help their workers.
A recent SecureSave study asked 1,600 respondents to share their opinions and perspectives on financial wellness and how their employers can best support them. Here’s what we learned.
A staggering 90% of respondents said that they would be interested in a workplace emergency savings account (ESA) if employers were able to provide matching contributions to help build those savings accounts. And 41% of survey participants said that if they were going to look for a new job today, a workplace ESA with employer matching would be more compelling than an employer-matched 401(k) long-term savings account.
Given recent fluctuations in the economy, job stability, and other important variables that support financial well-being, it’s perhaps not surprising that most employees are thinking harder about emergency savings than they have in the past. The SecureSave survey found that more than one-third (38%) of adults have experienced a financial emergency sometime in the past six months that they believe affected their work performance in some way.
And while the vast majority of respondents value emergency savings and would participate in a plan that was offered by their workplace, just under one-fifth (19%) of survey-takers said that they had enough stashed away in emergency savings to tide them over for six months to a year if they were to face unexpected job loss or another major financial emergency in the near future. An additional 27% had enough saved for three months.
The stress over financial instability is real, and it’s having a tangible impact on businesses in every industry: More than three-quarters of survey participants (77%) said that stress over money makes it hard for them to focus and negatively impacts their day-to-day productivity and performance at work. What steps are employees taking when they’re experiencing financial stress or a full-blown emergency?
Two-thirds of survey respondents did not feel comfortable asking their employers for help with an unexpected expense. Instead, they’re more likely to start looking for employment elsewhere, perhaps in the hope that a bigger salary or different benefits might make a difference to their situation.
Just fewer than half of participants (44%) said they planned to look for a different job in the next six months, including more than half of millennial (55%) and Gen Z (63%) respondents, and almost four-fifths (78%) of people who said they would be looking for a new job in the next six months also said they did not have at least $500 saved up to pay for an emergency. And this isn’t just a trend among entry-level or unskilled workers: The survey found that 27% of respondents who make more than $100,000 annually are living paycheck to paycheck.
In the meantime, what are employees doing to try to pay for unexpected expenses? If they don’t have money in an ESA, they’re either paying the debt using a high-interest credit card, borrowing money from friends and family (which comes with its own set of stressors), reducing overall spending until they can pay off the bill, or withdrawing money early from a long-term savings account, such as a 401(k).
All of these options are less than ideal; they either come with fees and additional financial penalties down the road, or the potential of damaging a supportive relationship.
We asked survey respondents what they wanted from their employers in terms of financial support and benefits that might help them solve these challenges, or avoid them entirely. While two-thirds of respondents (66%) would not feel comfortable asking their employer for help, the overwhelming majority (90%) said that they would participate in a workplace ESA if their employer offered one and provided matching contributions.
There are other financial support systems and incentives that employers can set up, of course, including a 401(k) retirement plan, a health savings account (HSA), mental health support, student loan repayment, and financial coaching. When we asked respondents which of these benefits would make the biggest difference in their financial health, 44% of respondents said that a workplace ESA would have the largest positive effect on their finances, above and beyond any other benefit.
Keeping your best employees happy and engaged at work can be difficult enough in a normal economy. When workers are feeling stressed about money and don’t have a cushion to help protect them in the event of an emergency, they’re more likely to start looking for employment elsewhere.
One of the best ways to keep them engaged and happy — and potentially attract more high-performing talent to your team — is to offer an emergency savings option, especially when the surrounding world is in turmoil. It gives your employees a greater sense of support and belonging, which is ultimately priceless.