Over the course of the last year, unsteady economic conditions have made financial wellness a top concern for employees. In fact:
- As of January 2022, only 44 percent of employees feel financial stability, with only 5 percent meeting their financial goals
- 63 percent of Americans are living paycheck to paycheck, with just one-third having enough funds to cover a one-time, unexpected $500 expense
- Since July, 50 percent of employees have had to take action due to make ends meet, such as tapping their emergency savings, working additional hours, looking for higher-paying jobs, and taking 401(k) hardships
Needless to say, employees are experiencing financial strain like never before. And the inability to meet their financial goals has caused mental health struggles and stress across all generations. Employees’ top concerns? Inflation, saving for retirement, understanding their investing options, navigating social security, and the amount of financial support they receive from their employers.
Inflation
Workers rank inflation ahead of other financial obstacles. Inflation has affected employees’ ability to save, especially for retirement. As of December 2022, the global inflation rate is 7.8 percent, with it forecasted to drop to 6.5 percent in 2023 and then down to 4.1 percent by 2024. It’s clear that inflation will be sticking around for a while and will continue to impact employees' financial wellness worldwide, so employers should look at solutions to help offset the impact of inflation on their employees.
Saving for retirement
Financial hardships of the pandemic combined with rising inflation have employees putting off their retirement plans—nearly 25 percent of workers say they plan to retire later than they initially planned. In addition to inflation, workers cite the declining stock market, increased interest rates, and the impact on their partner’s job or compensation as additional factors for putting off retirement. Employees want guidance on best investing their 401(k) account, how much they need to save for retirement, and anticipated taxes.
Understanding banking and investing
Between crypto, NFTs, and the stock market, employees have their choice from several different investment options to grow their wealth. But, little know how to best go about doing it. The same goes with banking—many employees are self-taught when it comes to knowing about different account types, fees they could incur, and understanding credit their credit scores. Equipping employees with this knowledge will enable them to create a financial life plan to help them achieve their goals.
Navigating Social Security
Fewer than 4 in 10 employers say they offer Social Security-related support, yet it is a top financial concern for the Baby Boomers in your workplace. Employees are seeking tools, calculators, and educational materials to help answer their questions about when to collect social security and its benefits. As an employer, consider offering training and resources on Social Security to address benefits, updates, and changes, as well as access to professionals to guide your employees through the process.
Available financial wellness support
The more financial strain employees feel, the more help they expect from their employers. Employees want support and guidance for various financial wellness initiatives they’re struggling with, such as saving for retirement, student loan repayment, covering emergency expenses, and healthcare assistance. If an employer can help even a little bit, it can make the biggest difference in employee engagement and satisfaction.
Help your employees reach their financial goals
As we continue to navigate economic uncertainty, financial wellness will be a top concern for employees in 2023. And it’ll be up to employers to help their employees navigate the landscape and ease their financial concerns. Learn more about how PTO Exchange can help your employees meet their financial goals by requesting a demo today.
Learn more about how you keep your employees financially healthy in our new guide.
Published on Jan 05, 2023 by Rob Whalen
