More than half of U.S. employees say financial stress is affecting their work, and many are responding by reducing contributions to the very benefits designed to help them, including their 401(k)s.
That’s according to Morgan Stanley at Work’s sixth annual State of the Workplace Financial Benefits study, recently cited in Employee Benefit News. Morgan Stanley surveyed 1,000 employed U.S. adults and 600 HR leaders. The findings come amid heightened recession concerns and rising energy prices driven by the conflict in Iran.
According to the survey, 56% of employees report that financial stress negatively impacts their work, and 61% say they’re reducing contributions to workplace benefits. On the employer side, 80% of HR managers say employees’ financial issues hurt productivity, and 53% say financial stress-reducing benefits matter more for job satisfaction than mental health support (26%) or physical wellness benefits (19%).
“Concerns over macro trends like inflation or the job market seemed to have resulted in employees reducing contributions to workplace benefits, including 401Ks and savings accounts,” said Craig Rubino, head of corporate relationship management and engagement at Morgan Stanley at Work, who was quoted in the Employee Benefit News article.
Employees are hungry for support. Seventy-three percent say they need to accelerate their financial planning efforts, and 84% report experiencing financial issues over the past year. The most common pain points: budgeting (39%), financial goal setting (35%), and retirement planning (34%).
That stress is affecting how employees think about their jobs. Eighty-five percent say they’d feel more invested in their company if it offered financial benefits tailored to their needs, and 91% would consider switching jobs for benefits that help them reach their financial goals. Meanwhile, 65% of HR executives say hiring and retention is their company’s top strategic financial priority for 2026—a six percentage point increase from the prior year.
Equity compensation also emerged as a significant motivator. Three-quarters of employees and 85% of HR leaders called it the most effective tool for driving engagement. Employees see it primarily as a way to reach long-term goals like retirement (28%), while HR leaders are more likely to emphasize giving workers a stake in company success (33%).
“As the labor market is shaped by AI adoption and a tighter hiring environment, employees increasingly value workplace benefits that provide stability and long-term financial support,” Mr. Rubino said.
The study suggests that companies offering integrated, guidance-driven financial benefits programs will be better positioned to attract and retain talent, especially when workers are feeling squeezed enough to cut back on contributing to the very benefits that could actually help them most.
