Dive Brief:
- Workers — even those making comparatively high salaries — are struggling financially, a WTW survey of more than 9,600 U.S. employees found. The June 16 results revealed that 41% of workers said they are living paycheck to paycheck (compared to 38% in 2019), including 36% of workers making $100,000 or more. The financial slip represents a dramatic leap for the latter group, only 18% of whom were living paycheck to paycheck in 2019.
- Employees said they’re struggling to access and pay for basic needs, the survey found, including housing (23%), healthcare (22%) and healthy food (19%). Major financial shocks have played a part; 31% of workers incurred a significant medical expense, 15% were victims of a financial fraud or scam and 13% were hit hard by divorce or separation expenses.
- “The link between financial stability and overall wellbeing has become even more precarious as employees fret over inflation, economic instability and workplace challenges,” Mark Smrecek, senior director of WTW’s retirement division, said in a release. “Employees are now looking to their employers for support. Employers, in turn, can help employees weather the storm and enhance their financial stability by factoring in wellbeing when considering programs.”
Dive Insight:
Over the past year or more, employees have used the Great Resignation to leverage greater compensation and benefits. Employers have largely delivered, raising wages across industries and investing in more unique and varied benefits.
Despite these attempts to meet employees’ needs, a concurrent rise in inflation has rendered them largely moot. Consumer prices were up 8.6% over the previous year in May, according to the U.S. Bureau of Labor Statistics, representing “the largest 12-month increase since the period ending December 1981.”
A 12-month comparison from BLS in February found that real hourly wages actually shrunk by 2.6%, despite a 5% growth in earnings during the same period. For some industries, a lack of wage growth meant the past year hit even harder; full-time higher education faculty members experienced a 5% decrease in wages after inflation, for example.
Employers can help by exploring different ways to ease workers’ financial pains on the benefits side of the spectrum. According to the WTW survey, 36% of respondents said employer-provided resources helped improve their financial situation — an increase from 27% in 2017. The survey also found close to half of respondents wanted their employer to offer apps and tools to assist them in financial planning.
Additionally, employers can look for other ways to fill in the gaps. Walmart last year rolled out and recently expanded its coverage for doula care, for example, meeting a need for pregnant associates that is rarely covered by traditional health insurance. Other companies have introduced wellness and mental health stipends, which can help employees continue to meet their mental and physical needs when other financial obligations take priority.
