The 2022 PwC Employee Financial Wellness Survey1 is out and the news provides insights for employers on the best way to help employees in this economic downturn.
As of May 2022, the inflation rate has risen to 8.58%, over 3.5% higher than one year ago and almost 7% higher than before the start of the pandemic2. Even without a degree in economics, employees understand that rising inflation is a problem.
The PwC survey found that employees are worried about rising costs, stagnating wages, and finances.
And these worries are causing problems for employees in all areas of their life:
- Mental health – 34%
- Sleep – 33%
- Self-esteem – 30%
- Physical health – 23%
- Relationships at home – 21%
- Productivity at work – 18%
- Attendance at work – 15%
Because employees don’t leave their problems at the door, their stress affects your bottom line. With the added pressures of inflation, here are three things to consider.
#1: Inflation Affects Retention
In 2021, employees who were considering changing jobs did so for reasons other than wages.
The most often cited reasons revolved around lessening stress and increasing work/life balance. Because of inflation, that has changed.
Now, two-thirds of those looking for a new job are doing so to find higher wages.
PwC found financial stress increased the likelihood of an employee looking for a new job by a factor of two. SHRM found that the costs to replace these employees are high3.
In fact, the cost to the employer for replacing an employee making $60,000 can be as much as $120,000 in losses. That is why anything that can be done to reduce attrition is worth considering.
With today’s tight economy, it may not be possible to increase wages, so the next best thing is to help your employees use the wages they have wisely.
Consider the following issues employees experience that make them more likely to switch employers and how a comprehensive financial wellness program can help.
Problem: Inability to meet monthly expenses.
Solution: Offer budgeting classes, tips, and tools. Provide access to employee discounts on products and services they use.
Problem: Using high-interest credit cards and loans to meet monthly expenses.
Solution: Offer access to wages more quickly and with low fees.
Problem: Feeling as if the employer doesn’t care about their financial wellness.
Solution: Provide employees with access to a financial coach. Offer an easy way to build an emergency fund. Consider some type of student loan assistance.
#2: Mental Health Issues Increase with Financial Stress
Almost half of financially-stressed employees have dealt with mental health issues due to that stress compared to just 15% of non-financially stressed employees.
Those whose financial issues affect their mental health are six times more likely to admit that their productivity has been affected on the job and seven times more likely to have missed work.
The PwC survey found that mental health issues due to financial stress are not affected by salary or race. However, millennial and female employees are more likely to be affected.
Problem: Employees are embarrassed about financial struggles.
Solution: Offer financial wellness topics as part of other offerings so those with financial struggles don’t feel singled out. Share success stories of those who have used the financial wellness resources (with permission, of course).
Problem: Employees with financial issues often experience a lack of motivation.
Solution: Consider incentives as a way to drive action.
Problem: Employees feel like financial struggles should remain confidential.
Solution: Offer in-person, phone, or video financial coaching.
Problem: Employees cannot afford mental health care.
Solution: Offer mental health care coverage as part of your healthcare coverage.
Keep Reading: The HR Guide to Reducing Employee Stress
#3: Financial Stress Decreases Productivity
Financial worries decrease productivity, with 55% of financially stressed employees admitting to dealing with their finances at work an average of three hours per week.
The 2021 Wellness Barometer Survey4 found that US companies are losing $4.7 billion per week due to lost productivity caused by employee financial stress.
Offering financial wellness resources can turn these losses into gains for both employees and their employers.
Problem: Millennials are more likely to have their productivity affected than GenX.
Solution: Provide a personalized financial wellness program that emphasizes the financial planning needed for specific employee issues.
Problem: Those with low productivity don’t know what to do about their finances.
Solution: Offer specific steps to take to reduce debt and other financial worries. Provide one-on-one financial coaching to offer specific help and guidance.
Enrich is a holistic financial wellness program designed to help employees gain financial health. To find out how Enrich can help your employees reduce the impact of inflation on their lives and your bottom line take a look at our guide that provides in-depth explanations for each element which contributes to the ROI calculation for this employee benefit.
1 - https://www.pwc.com/us/en/services/consulting/business-transformation/library/employee-financial-wellness-survey.html
2 - https://ycharts.com/indicators/us_inflation_rate
3 - https://www.shrm.org/hr-today/trends-and-forecasting/special-reports-and-expert-views/Documents/Retaining-Talent.pdf
4 - https://www.brightplan.com/2021-wellness-barometer-survey