HEALTH/BENEFITS
Workers Have Spoken: Financial Well-Being Benefits Matter Although the economy is showing signs of improvement, workers need benefits that will help ease their financial stress. By Mike Wilbert
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inancial well-being benefits have never been as important as they are today — for workers, employers, and benefit brokers and advisors. Workers, many of whom were living paycheck to paycheck prior to the COVID19 pandemic, find themselves farther behind the eight ball today and remain financially stressed. Employers feel the effects of worker financial stress on their bottom line and are now fighting to win the talent wars that ramped up as a result of the pandemic. Benefit brokers and advisors strive to make sure their product portfolios include an arsenal of financial well-being benefits in order to make sure their clients’ recruitment and retention efforts are competitive.
Employees And Their Finances: 2021
Nationwide Harris Poll research conducted on behalf of Purchasing Power reveals a great deal of insightful data on the state of employee finances, financial stress and COVID-19 effects. A key finding was that household income levels don’t discriminate. The survey shows that the pandemic had workers at all income levels living paycheck to paycheck from February 2020 through February 2021. Almost half of full-time employees in all household income levels reported that their financial situation was worse in February 2021 than it was prior to the COVID-19 pandemic. That includes 44% of those making more than $75,000 annually and 41% of those making an annual salary of more than $100,000. Faced with furloughs, layoffs and monthly income loss, employees turned to several sources to cover expenses. Delta 34
Air Lines reported in November 2021 that employees took about $1 billion in early withdrawals from their 401(k) retirement plans during 2020, indicating that workers were in financial stress. The Harris Poll survey showed how workers covered the monthly expense challenges of the pandemic, illustrating the impact on their financial well-being:
» 32% took money from savings.
still with us, and it will take more time for workers’ financial situation to recover. According to the survey, more than half of full-time workers expected their household financial situation to be better by January 2022; however, they anticipated their financial stress level will be the same or worse than it was last year. What are the top three things workers worry about most? Here’s what the Harris Poll revealed.
» 26% took money from their emergency
» 3 7% worry about having enough in
fund.
their or their spouse’s or partner’s employer.
emergency savings to cover unexpected expenses that might come up, such as car repair, home repair or a broken appliance. Those responses came from workers making less than $50,000 a year (44%) to those making more than $100,000 annually (34%) and all points in between.
» 13% received financial assistance from
» 3 5% worry about not having enough
» 17% withdrew funds from their 401(k) or other retirement savings.
» 1 3% requested a payday advance from
their or their spouse’s or partner’s employer.
» 10% took out a second mortgage or a
retirement savings.
» 3 4% worry about their mental or emotional health as a result of the pandemic.
home equity loan.
The workers who answered the survey readily admitted their financial stress negatively affects their work. This stress disrupts their physical health, their ability to focus, their productivity at work and their job satisfaction. This confirms that employee financial stress impacts the employers’ bottom line through increased health care costs, loss of productivity and lower employee retention rates.
Workers’ Financial Situation And Worker Stress: 2022
The Harris Poll found that 95% of employees reported they have financial stress, so what can we expect 2022 to mean for employee finances? Although the economy is better now than it was during the shutdown in 2020, the pandemic and its effects (as well as the current rise in inflation) are
InsuranceNewsNet Magazine » February 2022
Other items mentioned included unexpected medical expenses (30%), layoff or job elimination (27%), paying for basic necessities (26%), paying credit card bills on time (25%), incurring additional new debt (18%) and paying student loan debt (14%).
Voluntary Benefits In The Spotlight
Financial stress has always been a factor in the workplace, affecting workers' productivity and impacting their health and health care costs for the employer. Realizing that workers at all income levels are affected by financial stress, employers need to make sure their benefits packages provide robust financial wellness benefits that can provide a lifeline during these difficult times. Because they can address many of the specific needs that workers have as they continue to struggle with and overcome
