Last month we learned that high levels of employee stress can have a negative impact on workplace productivity, significant enough to cost U.S. businesses billions of dollars each year. However, research has shown that people who suffer from chronic stress also have higher rates of sleep deprivation1, overeating2, substance abuse3, accidents4,5,6, smoking7, health problems8, anxiety/depression9, and relationship troubles10. A study released earlier this year from the American Psychological Association (APA) found that money is the biggest source of stress for people across most demographic groups and unfortunately, financial worries appear to still a big problem for many Americans, according to a new report from Financial Finesse.
Specifically, 25 percent of U.S. workers who participated in a financial wellness assessment indicated that they were suffering from “high or overwhelming” financial stress last year, a marked increase from 18 percent in the 2012 survey. The vast majority (85 percent) of surveyed employees reported having at least some level of financial stress, and women were found to have a noticeably higher likelihood of feeling financially stressed. Age-related differences in financial stress were less pronounced but older individuals did appear to be a bit more worried about their money troubles than younger generations. Retirement is likely a factor behind this because even though a large proportion of Americans from all age groups reported being worried about old-age financial security, younger workers recognize that they have more time left to get their savings in order.
Further, the higher the level of reported financial stress, the less likely a respondent was to be on the right track for achieving a comfortable retirement. For example, 85 percent of surveyed workers who did not appear to be suffering from any financial stress said that they regularly contribute to their employer-sponsored retirement plan, compared to just 62 percent for workers overwhelmed by financial concerns. Similar stress-related differences were found in respondents’ likelihoods for making the most of an employer’s matching contribution and knowing how much money needs to be saved in order to generate a desired retirement outcome.
Surveyed workers suffering from elevated levels of financial stress also scored much lower on their financial wellness assessment in the areas of cash/debt management, retirement/estate planning, investing, insurance, and taxes. Moreover, employees dealing with high or overwhelming financial stress were generally more likely to say the following:
- I feel like my current financial situation is not under control.
- I don't think that I will meet future financial goals.
- I don't know who to trust with investing my money.
- I worry about the economy and/or stock market.
With such responses, and the high cost of financial stress in the workplace, many employers are unsurprisingly pursuing financial wellness initiatives that aim to educate workers and change financial habits for the better. Encouragingly, nearly three-quarters (72 percent) of surveyed HR professionals who indicated that their organization provides some form of financial education to the staff reported that the efforts have been “somewhat or very effective” in improving employees’ financial wellness.
Sources: NAPA, APA, Financial Finesse, SHRMPost author: Charles Couch