Three in four U.S. employees (76%) believe they will be worse off in retirement than their parents, according to the 2015 Global Benefits Attitudes Survey by Willis Towers Watson, a leading global advisory, broking and solutions company. Nearly as many believe Social Security will be less generous (71%) and government-provided health benefits will be worse (70%). Additionally, the survey revealed employees’ concern over their finances is having a negative effect on their daily lives, job performance and productivity.
The study of nearly 5,100 U.S. employees found less than half of respondents (48%) are satisfied with their financial situation. While this is an improvement over 46% who were satisfied with their finances in 2013 and just 26% in 2009, many employees remain concerned about how long their retirement savings will last. Three in 10 (31%) fear their money will run out 15 years into retirement, while half (50%) think it will disappear within 25 years.
“While the financial situation is improving for many employees, long-term financial worries linger, leaving them feeling vulnerable,” said Steve Nyce, senior economist at Willis Towers Watson. “Many employees still wonder how long they will have to work and how much they will have to build up in savings until they are able to retire.” One in five respondents (21%) have financial worries that are negatively affecting their lives; four in 10 (41%) often worry about their financial state, and more than one-third (36%) are worried about their levels of debt.
Financial concerns/stress impacting on-the-job performance
The research revealed that financial worries, which are strongly linked to stress, ultimately have an impact on people’s ability to perform their best work. In fact, 28% of people who are struggling with their finances admitted that it prevents them doing their best at work. In addition, higher levels of absenteeism can occur in employees with financial concerns. The survey found that people who are not worried about their finances reported they took an average of 1.9 absence days from work per year, whereas employees who are struggling financially are absent for an average of 3.5 days per year. Further, those who are struggling financially report being highly distracted on the job 12.4 days per year on average, compared to 8.6 days for those not worried about their finances.
“Financial security is a top-of-mind issue for employees,” said Shane Bartling, senior retirement consultant at Willis Towers Watson. “Financial worries can have a negative impact on an employee’s personal and work life, and inevitably affect productivity, employee engagement and satisfaction. Employers are in an excellent position to help employees achieve both retirement and financial security in the short and long term as well as reinforce good personal financial habits by providing tools, resources, and benefit and total rewards programs that best meet their employees’ needs.”
Interestingly, the survey found that more than six in 10 employees (61%) believe their employers should actively encourage them to save for retirement. However, employees are less comfortable with their employers becoming involved in their personal financial issues and are particularly uncomfortable with targeted messages. Only four in 10 (41%) are open to having their employers encourage them to better manage their personal finances. Even fewer, 30% feel comfortable with their employers sending targeted messages to employees with financial issues.
“Employers have a long-established track record around retirement messaging and more recently have been pushing healthy lifestyles through their health and well-being programs. Employers that think they have permission to charge ahead in a similar fashion on personal finance issues could end up disappointed or, worse yet, upset employees, which would be counterproductive to their goals. Employers have to be mindful of their approach if they are including personal finance education,” said Nyce.
Source: Globe Newswire