Financial stress may have a new adversary these days. Continuing inflation, interest rate hikes, rising costs, and economic uncertainty have Americans on edge when it comes to their personal finances. As financial stress continues to plague American adults at unprecedented levels, there may be some relief on the horizon. Increasing financial stress is taking a toll on a lot more than just the bank accounts of American workers. Americans are now suffering from poor mental and physical health, too. This is occurring at a time when employee satisfaction and productivity are also on the decline.
According to a recent report from Financial Finesse, an independent provider of workplace financial wellness coaching programs, there is a bright spot: American workers who receive ongoing financial coaching as part of a comprehensive financial wellness program see significant improvements in their finances over a relatively short period of time.
Here are some key findings from the Workplace Financial Wellness in America study, an annual snapshot of the American workforce through the lens of financial wellness:
- Employees reporting unmanageable financial stress climbed 34%, fueled by workers’ concerns about the U.S. economy and the ability to maintain control over their current financial situation. For example, their greatest source of stress is the U.S. economy and/or stock market and how it will impact their financial future (43%).
- Single parents report experiencing unmanageable financial stress most frequently (57%), followed by single adults with no children (28%) and married parents (23%). Married couples with no children were the least likely to report unmanageable financial stress (15%).
- The percentage of financially resilient workers decreased from 37% in 2021 to 32% in 2022, a direct result of the pressure of inflation on household finances.
- Employees who engaged in financial coaching achieved significant results: 89% of employees who adjusted their spending to save more for retirement are now saving enough to receive their employer’s full retirement match; 72% who adjusted their spending to save for goals are now saving regularly toward those goals; and 65% who created a plan for every paycheck to cover bills are now able to pay their bills on time.
- Custom financial wellness programs targeting employees of color have been particularly effective. One large-scale study tracking the impact of tailored programming and coaching for Black and Hispanic Employee Resource Groups found a 25% decrease in participants reporting high levels of financial stress and a 23% increase in employees who are considered financially resilient. Additionally, retirement confidence doubled.
Financial wellness programs are a popular employee benefit, and they have been shown to help American workers improve their financial situation. Financial coaching may further move the needle thanks to a high-touch, personalized approach. Improved financial wellness can lead to better productivity, happier employees, higher employee-retention rates, and increased participation and savings rates in workplace retirement plans. Many providers offer financial coaching for employees, and given the current inflationary environment and uncertain economic climate, now may be a good time for employers to consider the advantages of incorporating this valuable benefit into their current offerings.
