Payroll
Majority of GenZ Workers Stressed Over Finances, Report Lost Productivity
While 76% of workers are not satisfied with their company's financial benefits, 92% of leaders believe their company offers the financial support employees need.
Apr. 30, 2024
A majority of workers, including 86% of Gen Z, are stressed about their financial situation and report losing an average of more than 7 hours of productivity each week due to their financial stress, according to BrightPlan‘s 2024 Wellness Barometer Survey on the state of workforce well-being.
The problem is only getting bigger with younger generations seeing the most impact — Gen Z reports over 8 hours a week in lost productivity.
However, leaders appear to be largely in the dark on the true state of their employees’ financial well-being and a major disconnect exists between worker needs and employer support. For example, while leaders estimate that 30% of their workforce has an “excellent” financial situation, just 12% of employees would describe their finances in those terms. Organizations also highly overestimate how satisfied their team members are with the support they receive from their employers. While 76% of workers are not satisfied with their company’s financial benefits, 92% of leaders believe their company offers the financial support employees need.
For employers, the time to act is now. An alarming 78% of leaders say their employees’ financial stress led to higher turnover last year. This issue is only likely to worsen as younger generations, who not only have higher stress levels but also demand more of their employers, become an increasingly dominant force in the labor market.
The High Cost of Financial Stress
The majority (85%) of respondents are stressed about their finances. Much of this stress centers around uncertain economic conditions, with both workers and leaders reporting that they’re concerned about high inflation (95%), rising interest rates (90%), a potential recession (88%), and market volatility (87%).
Workers are losing on average 7.3 hours of productivity each week due to their financial stress1, costing US employers potentially $183 billion annually*. In addition, 78% of leaders say their employees’ financial stress led to higher turnover last year, noting that workers left for higher pay or better financial wellness benefits.1
According to the 2024 Wellness Barometer Survey, financial stress is also impacting other aspects of people’s well-being, with workers noting it has worsened their mental health (72%), social health (65%), and physical health (62%). Notably, leaders report being even more affected by financial stress than their employees.
Financial Benefits and Support Are Lacking
It’s promising that over 8 out of 10 leaders say their company either offers or plans to offer financial benefits. However, 76% of employees surveyed are not satisfied with their company’s current financial benefits package.
In fact, a major disconnect exists between workers and leaders when it comes to their perceptions around their employers’ support. While 92% of leaders say their company offers employees the financial guidance, support, and tools they need to achieve their life goals, just 56% of workers agree.
“Among the leaders we surveyed, 75% admit that their company places more importance on profits than employee well-being,” said Marthin De Beer, founder and CEO, BrightPlan. “What leaders don’t recognize, however, is that ignoring workers’ needs for financial support is having a sizable impact on their bottom line. Investing in financial benefits isn’t just the right thing to do for your people— it’s also critical to driving business success and longevity.”
Financial Literacy and Preparedness Remain Low
A strong foundation in financial literacy is essential for financial well-being. However, just 18% of respondents have basic financial literacy, even though 74% self-reported their literacy as being high or very high.
With workers not getting enough guidance from their employers, many are turning to other sources for advice — with serious consequences. Nearly 8 out of 10 respondents say they’ve received bad financial advice, for example from friends (52%), family members (51%), co-workers (43%), and social media influencers (41%). Over half (55%) report that they’ve made financial mistakes based on the misguided information they’ve received.
Due to these factors, many employees are experiencing low levels of financial preparedness. For example, 38% report having no emergency savings or only enough for up to 2 months, and 42% report unmanageable debt. Nearly half (47%) report saving either nothing at all or less than 10% of their income for retirement. By leaving employees to fend for themselves, employers are taking on the potential consequences related to productivity and retention.
Workers and Employers Are Adapting
Despite workers struggling to stay afloat, many are taking action to try and improve their financial situation. For example, the survey results find that 88% are reassessing their financial habits, 83% are budgeting and saving more, and 75% are cutting expenses. In addition, 75% report making adjustments at work, including working extra hours to boost their savings (30%).
Meanwhile, 76% of leaders say their company is making at least one change this year due to market dynamics. While some are turning up their investments in AI and automation, leaders are avoiding cost-cutting actions that would negatively impact employee well-being. For example, just 14% say their company is removing employee benefits in 2024, down from 27% last year.
“In our survey, leaders said the top people-related challenges they’re facing are supporting employees’ holistic well-being and attracting and retaining top talent,” said Dan Schawbel, Managing Partner, Workplace Intelligence. “While it’s encouraging that companies recognize the importance of offering financial benefits, they need to revisit their benefits and ensure they’re meeting employee expectations — especially if they want to recruit Gen Z talent. These young workers are struggling the most with their financial situation, and they also expect more from their employers in terms of support and benefits.”