The Effect of COVID-19, Financial Stress and What the Future Holds
Harris Poll, on behalf of Purchasing Power, conducted research among 917 adults age 18 and older who are employed full-time or have a spouse that is employed full-time.
Five Key Takeaways About Employee Finances in 2021
1. A majority (57%) of full-time employees surveyed have $1,000 or more saved for emergency situations, yet what worries 40% of employees most today is having enough in emergency savings to cover unexpected expenses that might come up, such as car repair, home repair or a broken appliance.
Worried about having enough emergency savings to cover unexpected expenses
| Household Income | |
|---|---|
| Less than $50,000 | 44% |
| $50,000-$74,999 | 40% |
| $75,000-$99,999 | 35% |
| $100,000+ | 34% |
| Credit Score | |
|---|---|
| 300-579 | 46% |
| 580-669 | 51% |
| 670-739 | 42% |
| 740-799 | 30% |
| 800 or over | 18% |
2. Most employees report they have financial stress, and nearly one-third (32%) incurred new/additional debt since the pandemic started.
Financial Challenges Employees Faced as a Result of the COVID-19 pandemic
32% needed to take money from savings to cover monthly expenses
20% accumulated additional/new credit card debt
13% requested a payday advance from spouse/partner employer to cover monthly expenses
17% withdrew funds from 401k/retirement savings to cover monthly expenses
26% needed to take money from their emergency fund to cover monthly expenses
10% took out second mortgage/home equity loan to cover monthly expenses
3. Two in five (40%) of employees admit that financial stress affects their work. Thus, employee financial stress impacts the employers’ bottom line through increased healthcare coverage costs, loss of productivity and employee retention rates.
How Financial Stress Affects Employees
95% of respondents have financial stress
84% of those said their financial stress affects them in some way
Financial stress factors that affect health, job performance and job satisfaction
1 in 3 (33%) employees said it affects their physical health
1 in 4 (24%) employees said it affects their ability to focus at work
1 in 5 (21%) employees said it affects their productivity at work
1 in 5 (21%) employees said it affects their job satisfaction
4. Financial well-being benefits matter. 79% of those employed full-time would be more likely to stay with their employer if they offered more financial well-being benefits in the employee benefits package.
Importance of financial well-being benefits
78% of employees reported that they can tell how much their employer cares about their financial well-being by the benefits they offer
79% of employees surveyed say they would be more likely to stay with their present employer if they offered more financial well-being benefits
5. More than 1 in 4 (28%) of employees would take advantage of an employee purchase program if available.
Financial well-being benefits employees would be interested in taking advantage of if offered through their employer
| Employee Purchase Program | 28% |
| Bill Payment Programs | 27% |
| Financial Counseling | 24% |
| Low-Interest Installment Loans | 24% |
| Identity Theft Protection | 23% |
| Medical Deductible Financing | 20% |
| Student Loan Repayment Benefit Program | 15% |
Want to know more?
Among the topics covered in The State of Employee Finances: 2021 survey are:
- What financial challenges employees faced as a result of the COVID-19 pandemic
- How many employees—at all salary levels—currently live paycheck to paycheck barely covering monthly living expenses
- How their household financial situation was affected by the pandemic
- How they paid for unexpected expenses during the pandemic
- What worries them most today
- What financial well-being benefits they would be interested in taking advantage of if offered by their employer
Download the White Paper summarizing key findings and/or the Full Survey.
Survey Methodology
This survey was conducted online within the United States by Harris Poll on behalf of Purchasing Power from February 10-12, 2021, among 2,015 U.S. adults ages 18 and older, of which 917 are employed full-time or have a spouse that is employed full-time. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact logden@purchasingpower.com.
About Purchasing Power, LLC
Purchasing Power, LLC, is an Atlanta-based voluntary benefit company celebrating 20 years as the leading employee purchase program for consumer products and services through payroll deduction. Helping employees achieve financial flexibility, Purchasing Power is available to millions of people through large companies including Fortune 500s, associations and government agencies. Purchasing Power is a Flexpoint Ford, LLC company. For more information, visit corp.PurchasingPower.com.