Financial Stress

October 16, 2023 by

Employee stress is on the rise as families and workers navigate higher prices, uneven wage growth and record credit card debt.

According to PwC’s 2023 Employee Financial Wellness Survey, 60% of full-time employees surveyed say that finances are the top cause of stress in their lives today. This is slightly higher even than the number of employees who were stressed about finances during the height of the pandemic, the survey revealed.

Even among employees earning $100,000 or more per year, nearly half (47%) are stressed about their finances. Financial stress impacts a wide range of employee health and well-being areas from mental health to sleep to self-esteem. This is an important consideration for employers today.

Following a notable trend over the past few years, PwC surveys showed that the number of full-time employees who report that their compensation isn’t keeping up with the rising cost of living expenses has risen to 59% in 2023. That’s up from 52% in 2022 and 41% in 2021.

The PwC report noted that employees reported difficulties meeting basic expense needs. Forty-nine percent of those responding to the survey said they find it difficult to meet household expenses on time each month (up from 41% in 2022). And among employees carrying credit card balances, 44% say they struggle to make minimum payments on time each month (up from 37% in 2022).

More than a quarter (28%) of employees said they often or always run out of money between paychecks. Even among those who earn $100,000 or more per year, 15% reported that they always or often run out of money between payments.

Why should employers care about employees’ financial well-being? Financially stressed employees tend to be more distracted, less engaged and more likely to seek another job, says PwC.

Distractions cost employers through employee productivity. According to PwC, among financially stressed employees who are distracted at work because of their finances, 56% spend three hours or more per week at work dealing with or thinking about issues related to their personal finances.

In today’s competitive talent market, it’s important to take note that financially stressed employees are also more likely to leave.

Financially stressed employees are twice as likely to be looking for a new job (36% of financially stressed employees compared to only 18% of non-financially stressed employees). Seventy-three percent of financially stressed employees say they would be attracted to another employer that cares more about their financial well-being compared to just 54% of non-financially stressed employees.

Do you care?