Financial well-being is weighing on more U.S. employees’ minds and they are less productive as a result.
In a dramatic shift, roughly one-third of workers felt financially secure this year, down from close to half two years ago. And their state of mind is affecting their work.
That’s according to a biennial survey of employees’ attitudes by consulting firm Willis Towers Watson that said the sentiment was expressed after several years of improvement.
“We were a bit surprised,” given the upward trajectory in recent years, said Steve Nyce, senior economist at Willis Towers Watson.
Nyce attributes the troubled feelings to consumer debt creeping up, lower relative wage growth, higher healthcare costs and lower savings, among other factors.“We have the stock market making new highs just about every day, but people are troubled fiscally,” Nyce said. “Unless we can find a way to drive economic growth, we’ll have leaner times.”
Employers can “get to know employees and what their challenges and fiscal priorities are and tailor solutions,” Nyce said.
That’s because “feeling this way very much affects their work.” Nyce said. “It drains their energy and they are less engaged.”
Only 29% of these employees were fully engaged at work, compared with more than half of employees without any worries who were fully engaged.
Among fiscally struggling employees, 31% said money concerns were keeping them from doing their best at work. Higher levels of absenteeism were found among struggling employees.
Many employees would like their employers to offer tools that provide suggestions on how they can improve their financial situation. However, an even larger percentage (57%) say it’s not the role of an employer to send personalized messages to employees who are facing important financial decisions, and half say employers should not send personalized messages to employees who are not saving enough for a secure retirement.
Additionally, 7 in 10 reported high (37%) or above average (33%) stress levels, while 30% described their health as poor.
There is a clear connection to good health. Employees without money worries were also in good health (35%) or very good health (55%) while only 5% reported high stress levels.
Among other findings from the survey:
- Only 31% of employees do budgeting on a regular basis; however, the 24% who don’t budget, but instead actively monitor, have even higher financial confidence.
- Less than half (47%) of U.S. workers are confident they’ll have sufficient resources 25 years into retirement while 57% are confident they’ll have enough resources 15 years in retirement. Both figures are down from 2015.
- 81% of struggling employees are living paycheck to paycheck. Only 20% of struggling employees pay their credit card in full each month.
- More than a third of U.S. workers experienced a moderate (24%) or severe (13%) financial hardship. Ten percent have taken a loan from their 401(k) plan, while 6% have made a permanent hardship withdrawal from their plan.