Finances are a major source of stress for employees, affecting both their personal lives and their productivity at work, according to Morgan Stanley’s inaugural State of the Workplace Financial Benefits Study.
The study found that employees across all generations are struggling with their personal finances during the pandemic:
- 91 percent of employees report having faced personal financial issues, with the top three being household budgeting (47 percent), debt reduction (42 percent), and emergency and short-term savings (30 percent).
- 23 percent of millennials report having faced a full-blown financial crisis compared with 17 percent of Gen X and 8 percent of boomer employees.
- Employee contributions to all financial accounts took a hit: 59 percent of employees said they needed to reduce contributions to savings, debt or loan payments that occurred across 401(k) savings accounts (29 percent), long-term savings (28 percent), emergency and short-term savings (25 percent), and debt and loan payments (25 percent).
- 64 percent of employees report that financial stress is negatively affecting their work and personal life, while 82 percent of employers are worried personal financial issues affect employee work productivity. This is notably higher among millennials, where 70 percent cite higher financial stress compared to 61 percent of Gen X and 49 percent of boomer employees.
“The pandemic has created negative financial consequences for employees across a myriad of industries, roles and personal situations,” said Brian McDonald, head of Morgan Stanley at Work. “Yet, the crisis also produced an opportunity for employers, as employees are increasingly looking to the workplace for assistance with short and long-term financial needs like budgeting, managing debt, building emergency savings and planning for retirement. Given the financial hardships employees have faced over the pandemic, we are not surprised to see financial wellness tools evolve from nice-to-haves to necessities.”