Levels of financial stress are elevated and affecting employees’ productivity at work and reshaping retirement altogether, according to a new report from SecureSave. Data from a survey of U.S. workers found that 97% of workers say they experience financial stress, with 71% reporting stress at moderate to extreme levels.
Higher levels of financial stress play a significant role in employees’ productivity – primarily affecting absenteeism. According to the survey, 85% of workers reported that financial concerns impacted their productivity at work, with 2 out of every 5 American workers suffering negative work attendance events in just the last 6 months as a result.
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As a result of these concerns, 33% of American workers said they have made a decision that negatively impacts their retirement readiness, such as reducing or eliminating 401(k) contributions. Retirement outlook is bleak for many workers, with 37% believing they will never retire or will have to work past the age of 70.
As many employees are fighting to make ends meet month-to-month, nearly 71% of workers have 2 months or less of emergency savings funds. According to the survey, in the event of an unexpected $500 expense, two in five working Americans would have to dip into savings. And 1 in 7 would not be able to pay for it at all.
However, the report found that emergency savings accounts (ESA) can make a huge difference in reducing financial concerns. The survey found that even a $200/year employer contribution to an ESA significantly boosts employee productivity, retention and retirement readiness for 95% of workers.
Emergency savings also positively correlated with employee retention. Americans with 6 or more months of emergency savings reported an 88% higher intention to stay and not look for a new job in the next six months compared to those with no emergency savings.
Additionally, the survey found that the more money employees have in their emergency savings fund, the more likely they are to never miss a shift at work. Eighty-two percent of employees who have six or more months of emergency savings never missed work in the past six months.
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