Distressing news from financial wellness pioneer Financial Finesse, which found financial stress levels as high as 2008, when the housing and financial crisis crashed much of the global economy. The company’s Workplace Financial Wellness in America report, an annual snapshot of the American workforce through the lens of financial wellness, paints a bleak picture of financial stress and saw the highest levels reported among Black and Hispanic Americans and single parents.
The study analyzed employee financial stress and resilience levels and reported on how workers feel about their finances and the toll of financial stress on physical and mental health.
“Looking at today’s headlines, it’s no wonder that employees are facing such high levels of financial stress,” Liz Davidson, Financial Finesse Founder and CEO, said in a statement. “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.”
The good news, she added, is that when employees receive ongoing financial coaching, most make what she said are “dramatic improvements to their finances over a relatively short period of time.”
Key findings from the annual snapshot include:
- 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%).
- In 2022, Black and Hispanic populations were 38% and 28% less likely to have a positive cash flow than their White counterparts, respectively.
- 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.
“It’s unacceptable that a whopping 64% of the country’s workforce are living paycheck to paycheck without a financial cushion when we have solutions available to address this problem,” added Greg Ward, Director of the Financial Wellness Think Tank and one of the report’s authors. “It’s amazing to see the growth of employee financial wellness programs, but to truly restore upward mobility, especially to younger generations, we need employers of all sizes to coalesce around this issue and make it a central part of their commitment to their employees.”
Download the full Workplace Financial Wellness in America report HERE.
