Fnancial stress among U.S. workers has increased substatially over the past year, according to Financial Finesse, an independent provider of workplace financial coaching programs.
The number of employees who experienced unmanageable financial stress went from 20% in 2021 to 27% in 2022, according to a new survey by Financial Finesse of nearly 34,000 American employees that was released today.
At the same time, nearly 80% of employees are in some level of financial crisis or are struggling financially, according to the study, “Workplace Financial Wellness in America,” which was prepared by the Financial Finesse Financial Wellness Think Tank.
“During the financial crisis in 2009 and 2010, about one in three employees experienced financial stress, then it decreased to about one in five in the years afterwards,” said Liz Davidson, founder and CEO of Financial Finesse, during a webinar yesterday. “But now we are reaching the 2009 numbers again. And the fact that it increased 34% in just one year unprecedented.”
“We are seeing this stress manifest itself in increased uncertainty about retirement” as well as in other areas, added Julie Everett, senior financial planner at Financial Finesse.
Greg Ward, director of the Financial Finesse Financial Wellness Think Tank, said, “Employees bring stress with them to the workplace, increasing absenteeism and reducing productivity.”
“It is important for employers and their advisors to know that one size does not fit all when it comes to financial coaching,” Davidson said. “Each employee brings different circumstances to the workplace, and women and Blacks and Hispanics are affected differently than white men. Also couples who are married with no children are affected differently than singles, or couples with children.”
In 2022, Black populations were 38% and Hispanic populations were 28% less likely to have a positive cash flow than their White counterparts, the report said. Single parents reported experiencing unmanageable financial stress most frequently at 57%, followed by single adults with no children at 28%; married parents at 23%; and married couples with no children at 15%.
The report also noted that the percentage of financially resilient workers decreased from 37% in 2021 to 32% in 2022, as “a direct result of the pressure of inflation on household finances,” Financial Finesse said.
“‘Increasing the levels of stress is the fact that the research showed that two out of three Americans are living paycheck to paycheck,” Ward said.
Financial coaching programs benefit employers because employees’ mental health improves as their financial health improves, Everett said. According to the research, 43% of are concerned about how the current financial situation will affect their futures.
Citing some things that work to improve financial wellness, the Financial Finesse executives said of those employees who participated in financial wellness programs, 89% adjusted their spending to save more for retirement; 72% adjusted their spending to save regularly toward; and 65% who created a plan for every paycheck to cover their bills.
“Looking at today’s headlines, it’s no wonder that employees are facing such high levels of financial stress,” Davidson said. “As a society, we cannot ignore the serious consequences of high financial stress – including declining mental and physical health and decreased employee satisfaction and productivity.”