The COVID-19 pandemic has challenged the daily routines of all the individuals and the global economy too. Apart from being a major physical and mental health crisis, COVID-19 is also posing short and long-term economic threats to the financial wellbeing of employees and employers.
PwC surveyed US adult employees with full-time jobs to understand their current financial situation, how they are dealing with the unprecedented global crisis, and how it has affected their financial wellness and holistic wellbeing.
PwC Financial Wellbeing Survey 2020
The idea of conducting and publishing the survey outcomes was to help employers understand the financial wellbeing of their employees, and its impact on their holistic wellness. The trends could help employers make suitable suggestions and decisions for the better financial wellness of their employees, and help them sail safely through these tough times.
The PwC Employee Financial Wellbeing survey was conducted with 1,683 full-time employed US adults in January 2020, just before the COVID-19 cases rose in number. The survey respondents were categorized into 4 major groups based on their age –
- 18 – 23 years – Gen Z
- 24 – 38 years – Millennials
- 39 – 59 years – Gen X
- 60 – 75 years – Baby Boomers
One of the first upshots deducted from the survey outcomes was about the possible stress factors. While 54% of all the participants agreed that financial or monetary matters caused them the most stress, 18% said their job security stressed them, 12% said personal relationships, 11% said health and wellness concerns, and 5% had other reasons to stress out during this COVID period.
The survey revealed that many employees were stressed due to their job security and uncertain financial wellness, and were going through tough times that affected their mental health and holistic wellness. More than 1/3rd of all the respondents saved less than $1000 for unexpected expenses.
Employee groups who saved less than $1000 for unexpected expenses –
- 38% of all the employees
- Gen Z – 62%
- Millennials – 37%
- Gen X – 34%
- Baby Boomers – 37%
With the rise of the unemployment cases and the employed ones facing a dire financial crisis, most of the Americans are looking forward to financial wellness support from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Although the CARES Act may help a few people who are dealing with immediate financial issues, a larger section of the American employees who have lost their jobs or have pay cuts may not be able to withstand the downturn for long. While individual filers can receive a recovery allowance of $1,200, joint filers may get $2,400 and $500 for every eligible child.
Using Retirement Savings For Short-Term Relief
With the economy aggravating financial issues, many people are resorting to using their retirement savings to overcome the current uncertain times. Hoping that the crisis is temporary, many employees from different generations are planning to meet their unexpected expenses, medical costs, and their routine bills by using the money held in their retirement savings funds. However, the short-term relief was going to affect their long-term working and retirement plans. Sadly, the Baby Boomers said they need to work for a long time now to save back for their secure retirement.
While an average of 53% of all the employees were planning to use their retirement savings to meet unexpected expenses during these uncertain times, almost 20% needed the funds to meet their medical expenses, 4% for education expenses, and 9% to pay off their credit card bills.
In 2019, 50% of the Baby Boomers and 48% of all the employees were planning to keep working even during their retirement due to financial wellbeing needs or their interests. However, things changed in 2020, and now 56% of the Baby Boomers alone and 51% of the total employee groups are planning for the same.
Offering and Seeking Financial Guidance
With employees stressing out and facing issues due to financial factors, employers need to step up and take measures to guide and help their workforce overcome their concerns. The survey showed that many employees seek financial wellbeing guidance from professionals or employers only when they reach a serious stage of their financial crisis.
- 8% – Don’t need guidance
- 10% – While going through personal life experiences like marriage, divorce, job change, etc.
- 25% – During financial issues like debts, income loss, unexpected expenses, etc.
- 42% – Making important decisions like buying a home, making investments, etc.
Employer Input for Employee Wellness
While the CARES Act has a 3-year window, employers can make use of this time-frame to arrange for funds recontribution to their employees for financial relief. HSA contributions, health insurance, and 401(K) employee retirement funds could be few ways to help in contributing funds to the employees.
Employers can also help by offering corporate wellness programs that improve employee health and wellness, especially their mental wellness as it can be easily affected by financial stress. They can also financial wellness programs by inviting experts and consultants who offer professional guidance to help employees make suitable financial decisions for their savings, investments, and overall budgeting. It is also important to consider employee interests about the benefits and perks they need to meet their financial and holistic requirements.
When employers taking such efforts to support and help employees at such uncertain and tough times, it could be reciprocated with a loyal and appreciative workforce that is resilient and engaged to boost organizational productivity and workplace wellness.