Dan Schawbel says employees are increasingly feeling the stress coming from cost-of-living pressures — and it is something employers ignore at their peril.
As we approach the second half of 2023, the state of global economic uncertainty continues to affect both workers and business leaders alike.
In a new survey conducted by my company, Workplace Intelligence, and BrightPlan, a leader in total financial wellness, the vast majority of responders put high inflation (96 per cent) at the top of their list.
Also mentioned frequently were rising interest rates (90 per cent), and market volatility (89 per cent).
Some 92 per cent of employees were stressed about their personal financial situation.
Nearly half (48 per cent) said they had more debt than they could manage, and 35 per cent had no emergency savings or only enough for up to two months.
Taken altogether, these concerns are having a notable impact on people’s wellbeing.
Financial worries are also impacting people at work, with around half reporting that their engagement (50 per cent) and productivity (48 per cent) have declined as a result.
To regain control over their financial situation, many workers are taking matters into their own hands with at least eight out of 10 say they’re improving their financial habits or cutting expenses.
However, employees can’t turn things around on their own, and most leaders recognise this.
The vast majority of the HR and C-Suite executives we surveyed believe their company should provide guidance and tools to help employees grow their wealth, improve their financial literacy and manage their money.
Here are three steps employers should take to address the poor state of workforce financial wellbeing.
Take a pulse check on your workforce.
As a first step, executives need to gain a more accurate understanding of their workforce, including their financial wellbeing and their perceptions around how their organisation supports them.
For example, just nine per cent of employees say their financial situation is ‘excellent’, but leaders estimate that 26 per cent of their workforce has an ‘excellent’ financial situation.
Gathering this information doesn’t have to be difficult or time-consuming — an anonymous employee survey can provide an abundance of insights.
Leaders may also wish to hold meetings or town halls to discuss in greater detail how people are feeling and where they’d appreciate more support.
Upgrade your financial wellness benefits.
One of our more concerning findings was that 74 per cent of employees are not satisfied with their financial benefits. For example, workers say they’d like access to an emergency savings fund, debt management services, home ownership assistance, a financial advisor, and personal or home loans.
Our survey revealed that financial wellness benefits are one of the top innovative benefits that people look for in an employer, coming in only behind flexible time off.
Boost benefits usage and awareness through better communication.
While adding new benefits will help move the needle on people’s financial wellbeing, this should go hand-in-hand with boosting communication efforts.
That’s because many workers simply don’t know what’s available to them.
This lack of awareness is likely driving low benefits usage, another pressing issue revealed by the survey.
By not using their benefits, workers are missing out on critical opportunities to improve their financial situation and build long-term wealth — and it’s up to leaders to help.
External economic conditions as well as personal financial concerns are having a significant impact on people’s wellbeing and productivity.
Workers and leaders alike are losing a significant amount of time each week due to their financial stress.
To address this challenge, organisations need to take action — and quickly.
This means getting a real-time pulse on employee sentiments, ensuring that workers have access to the financial tools they need, and amplifying communications around financial benefits so people know what’s available to them.
*Dan Schawbel is a bestselling author and Managing Partner of Workplace Intelligence, a research and advisory firm helping HR adapt to trends, drive performance and prepare for the future.
This article is part of his Workplace Intelligence Weekly