Is financial stress damaging your company's productivity? Three in ten employees feel mentally or emotionally stressed over preparing for retirement, and another 3 in 10 admit they spend time worrying about their finances while at work according to the 2017 Retirement Confidence Survey conducted by EBRI.
Money is the greatest source of anxiety for employees today. The EBRI study also finds stressed employees feel less financially secure and confident about having enough for retirement than employees who are not stressed. Stress takes a toll on employee productivity. Over half of the employees who indicate they are financially stressed, 18 percent believe they would be much more productive at work if they weren't worried about their finances.
It's not surprising that employees are concerned about their financial well-being when you consider that Retirement Confidence Survey found that:
- Employees' retirement confidence is lower than last year - falling from 64 to 60 percent.
- Almost half (44 percent) are not confident they are doing a good job preparing for retirement.
- Only about half feel very to somewhat confident about how much to contribute toward retirement (53 percent), how to invest their retirement contributions (51 percent), or how to protect their retirement savings (52 percent).
- Just 41 percent of employees have tried to calculate retirement needs.Almost half (47 percent) of retirees find health care expenses in retirement to be higher than expected.
How can employers help alleviate employees' financial stress and improve productivity? The EBRI data indicates retirement plans and financial education can help, finding that:
- Employees with access to a retirement plan are less likely to say they are mentally or emotionally stressed about retirement planning (26 percent) compared to 43 percent of employees without a plan.
- Employees with a retirement plan have more confidence, have saved more, have done more to prepare, and feel less stress about retirement preparations than those without a retirement plan.
- Sixty-six percent of employees with a retirement plan have saved more than $25,000 for their retirement needs, while retirement savings for 67 percent of those with no retirement plan amounts to less than $1,000.
- About half of all employees say their work productivity would be helped by financial education programs, including retirement planning (53 percent), financial planning (49 percent), or health care planning (47 percent).
- Employer matching contributions and automatic payroll deductions can also help. Among employees who are not currently saving, approximately 3 in 4 would be encouraged by a plan match and two-thirds by automatic payroll deductions.
Financial benefits like retirement plans and financial wellness programs can help your employees take steps toward better financial health and, in turn, provide relief from financial stress. These benefits deliver value to employers too. Studies find that companies who care about their employees' financial wellness are rewarded with improvements in employee engagement, productivity, and loyalty.