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Inflation is finally beginning to ease, but it's already hurt worker's wallets. A new analysis from the Employee Benefits Research Institute shows that workers' financial fears rose significantly between 2021 and 2022, leaving employees feeling unprepared for retirement and unexpected costs.
The analysis, published in the EBRI's weekly Fast Facts column, uses data from their 2022 Workplace Wellness Survey. Among the key findings are that financial worries have risen: in 2022, 34% of employees rated themselves as highly concerned about their household's financial well-being, while 26% reported they were moderately concerned. In comparison, in 2021 those figures sat at 29% and 20%. The shifts mean only 40% of people in 2022 rated their concern as low, compared to more than half of workers in 2021.
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Likewise, employees consider themselves relatively unprepared to handle unexpected expenses. For instance, only 67% of workers said they were very or somewhat prepared to handle a sudden expense of $500 in 2022, compared to 79% of workers in 2021. For an unexpected expense of $5,000, the figures were even more grim, with only 45% being very or somewhat prepared, compared to 62% in 2021.
Related: How to support employee financial wellbeing and get their attention during times of stress
Moreover, 4 in 5 employees said debt is worrying for them in 2022 and describe it as "a problem" (with 30% calling it "a major problem"), compared to less than two-thirds of workers in 2021 (and 24% saying it was "a major problem"). In fact, when workers ranked their top priorities, debt jumped into the third-most cited concern, with 45% of employees saying it was one of their top three priorities in 2022, compared to just 29% of respondents in 2021. In 2022,
Despite the bad outlook, Paul Fronstin, director of Health Benefits Research at EBRI, notes that many companies are implementing financial wellbeing programs to help workers.
"Costs continue to be reported as the top challenge in offering financial wellbeing programs, and as a result, employers are looking for ways to measure their impact both through employee satisfaction/retention and productivity," he says. "Despite the pressures of increasing costs and expectation of the need to measure financial wellbeing initiatives' impact, employers are expecting their budgets for these benefits to increase."
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