Purchasing Power Outlines Why Employers Should Take Note of This 2022 Trend
ATLANTA, GA – What will 2022 mean for employee finances and their financial stress? Only half (52%) of full-time employees expect their household financial situation to be better in January 2022 than it was in January 2021, according to research1 by the Harris Poll on behalf of Purchasing Power. At the same time, however, half (51%) of employees anticipate their financial stress level will be the same or worse in January than it was a year ago.
Employees in all income levels are looking for solutions to improve their financial situation that took a dive as a result of the COVID-19 pandemic and is still in recovery mode. Full-time employees made it clear in the Harris Poll that financial well-being benefits matter and that they would be more likely to stay with their employer if more of those benefits were offered.
Financial well-being benefits are important indicators, employees say. The Harris Poll data2 revealed that 78% of full-time employees can tell how much their employer cares about their financial well-being by the benefits they offer. And further, 79% said they would be more likely to stay with their present employer if they offered more financial well-being benefits.
“Employees have spoken. Financial well-being benefits may very well be the most consequential benefit in the employee benefit package for 2022,” says Purchasing Power Chief Executive Officer Trey Loughran. “Especially at a time when ‘The Great Resignation’ is affecting so many organizations, employers will want to listen to what employees are saying about financial well-being benefits. For both recruitment and retention purposes, employers should make sure their employee benefits packages provide robust financial well-being benefits that can provide a lifeline during difficult times.”
Employers, however, may not realize the high value employees are placing right now on making more financial well-being benefits available. An informal survey3 of HR professionals working in companies with 1,000+ employees revealed that while 88% of those professionals believe it is important for employees to feel that their employer cares about their financial well-being, only 30% reported that they were planning to add any financial well-being benefits to their employee benefit package in 2022.
Financial well-being trends that point to the importance of financial well-being benefits in 2022 include:
1. Employees at all income levels report that their financial stress will be the same or worse in 2022 than a year ago.
Half (51%) of the employees responding to the Harris Poll4 anticipate that their financial stress level will be the same or worse in January 2022 than it was at the beginning of 2021. Household income levels don’t discriminate on financial stress, as employees across all income levels expect their financial stress to be the same or worse in January:
- Less than $50,000 – 49%
- $50,000 - $74,999 – 56%
- $75,000 - $99,999 – 59%
- $100,000+ – 49%
2. Employees are concerned about not being able to cover unexpected expenses.
More than one-third (37%) of employees are worried about having enough in emergency savings to cover unexpected expenses that might come up such as car repair, home repair, broken appliance, etc. Those expressing these concerns ranged from employees making less than $50,000 (44%) to those making over $100,000 (34%) and all points in between. One of four employees responding to the Harris Poll said that taking money from their emergency fund to cover monthly expenses was one of the financial challenges they faced because of the pandemic.
3. Not having enough retirement savings is worrying employees.
Not having enough retirement savings worries just over one-third (35%) of employees, more so for women (41%) than men (31%). Almost one in five (17%) of employees said they withdrew funds from their 401(k)/retirement savings to cover monthly expenses during the pandemic.
Employee retention can be costly. It can cost 33% of a worker’s annual salary to replace them if they leave.5 “Adding a selection of financial well-being benefits that are voluntary benefits doesn’t cost an employer to provide, yet can make a difference in retention. As an example, a tenure study of 594,000 eligible employee population of our customer database who used our purchasing program over a 12-month period showed a decreased turnover rate of 45%,” Loughran added.
Voluntary benefits are a win-win option for employers wanting to add financial well-being benefits. Employees bear the cost of the voluntary benefit, so there is no budget impact for employers. And employees have a selection of benefits from which they can choose ones that are especially important for their own situation. These could include everything from identity theft protection, pet insurance and employee purchase programs to financial counseling, bill payment programs, medical deductible financing, student loan repayment benefit programs and automatic savings programs.
“It’s going to take time for employees’ financial situation to improve, and their financial stress in turn impacts the employers’ bottom line through increased healthcare coverage costs, loss of productivity and decreased employee retention rates. Smart companies are finding ways to help, which will ultimately mean increased employee performance and improved retention and loyalty,” Loughran explained.
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 jswaney@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 https://corp.purchasingpower.com.
1,2,4The Harris Poll on behalf of Purchasing Power, conducted online within the U.S., February 10-12, 2021, among 2,015 adults ages 18 and older, of which 917 are employed full-time or have a spouse employed full-time.3Purchasing Power online survey of 31 HR professionals in organizations with 1,000+ employees, November 4-10, 2021.
5Employee Benefit News, “Avoidable Turnover Costing Employers Big,” Nick Otto, Aug. 9, 2017.