As economic challenges worry workers, day-to-day finances are starting to cause more stress than longer-term financial priorities, like retirement, a new survey finds.
Results from the 2023 Workplace Wellness Survey (WWS) published by the Employee Benefit Research Institute (EBRI) and Greenwald Research show that for the first time in the WWS, workers report that having enough savings for an emergency and paying monthly bills are the financial issues that cause them the most stress. In years past, saving enough for retirement held the top spot among concerns; still, it remains a close third.
This comes as 74% of American workers report that they are moderately or highly concerned about their workplace well-being, and more than 4 out of 5 American workers are at least somewhat concerned that there will be a recession in the next year or that inflation will remain high for the next 12 months.
“What we found surprising is that this is the first year that saving for retirement is not the primary financial stress factor for employees. Instead, we found that day-to-day issues like emergency savings and paying for household bills are top of mind for workers,” said Jake Spiegel, Research Associate for Health and Wealth Benefits at EBRI.
Emergency Savings
The findings further suggest that most employees are not fully prepared for unexpected expenses and would prioritize saving for an emergency in order to become more prepared.
To that end, 4 in 10 workers feel at least somewhat prepared to handle an emergency expense of $5,000, though only 18% feel very prepared. Far more Americans (70%) feel more equipped to manage an unexpected expense of $500, though 3 in 10 feel ill-prepared.
To pay for an unexpected expense of $5,000, nearly half of employees would take the funds from their savings or investments. Additionally, 3 in 10 would charge the expense to their credit card (31%) or ask family and friends (31%).
Notably, more than half of employees agree that their retirement plan savings are the only significant emergency savings that they have. And while the SECURE 2.0 Act paved the way for plan sponsors to add an emergency savings component, only 2 in 10 workers report they are currently offered an emergency savings account at work.
Among those without an emergency savings option, more than 4 out of 5 employees would be interested in one. Further, when asked to allocate $600 across six possible workplace accounts, employees allocate on average $171 to an emergency savings account—trailing only the retirement savings account.
Financial Security and Satisfaction
Not surprisingly, retirement savings plans and health insurance contribute to employees’ feelings of financial security, yet benefits satisfaction overall has declined, the WWS further reveals.
Down slightly from last year and from 2021, 40% of employees are extremely or very satisfied with their benefits package and 22% are not too or not at all satisfied. At the same time, 7 in 10 agree at least somewhat that their benefits package is designed to meet their lifestyle and/or family needs.
Health insurance (81%) continues to be the most common benefit employees say is offered to them, followed by retirement savings plans (78%), dental insurance (72%), vision insurance (69%), and life insurance (61%).
What’s more, health insurance (70%) and retirement savings plans (54%) are most important to employees’ decision to stay in their current job or choose a new job. Six in 10 say being offered health insurance (59%) and retirement savings plans (56%) through their employer contributes a lot to their feeling of financial security.
Employees feel the most valuable improvements to their benefits package would include greater employer financial contributions (54%), more benefits and resources to help with their financial well-being (34%), and more choices and benefits to choose from (31%), the findings show.
And although health and retirement benefits remain the most important for job decisions, employees place work-life balance (55%), flexibility in work schedule (48%), and generous paid-time-off benefits (37%) as the top three of what they most value from an employer. Surprisingly, these rank higher than quality health and retirement benefits.
Meanwhile, just over a third (36%) describe the work-life balance at their company as excellent or very good, which has been trending downward since 2021. In fact, 3 in 10 rate it as fair or poor, EBRI notes.
A total of 1,505 American full-time and part-time workers ages 21-64 were interviewed for the survey. This year included a national sample of 1,002 workers and an oversample of 503 completed surveys among caregiver workers, bringing the total to 753 caregiver workers. Information for this study was gathered through 20-minute online interviews conducted in July and August 2023.
The complete 2023 Workplace Wellness Survey report can be accessed at the following link: www.ebri.org/health/Workplace-Wellness-Survey.
