At a recent seminar sponsored by Prudential, Paul Braihm, CFP of The American College, detailed the challenges of declining US productivity and its main culprit – financial stress by employees that occupy their waking (not just working) hours. With talent at an all-time premium and unemployment rates at historic lows, employers are concerned with making sure their people are healthy, mindful, present, engaged and productive at work. Dr. Steven Covey, Guru of Productivity, said “Having spent my career helping individuals and corporations increase productivity, I’ve become convinced that one of the greatest, unnoticed drains on individual productivity is the distraction that financial stress puts on people.”
These stressors affect people at all levels of organizations including the “Highly Compensated”. All employees can be affected and therefore, all employers can and should provide help. A January 2019 State Income & Policy Report from non-profit ProsperityNOW showed that 43.3% of Massachusetts households did not have emergency savings, 49.2% of renters are “cost burdened” and 9.3% of adults could not see a doctor due to cost despite the lowest uninsured rates in the nation.
Financial stress at work costs employers a lot of money in terms of absenteeism, tardiness, presenteeism, poor health, lower pay satisfaction, higher turnover, lower employee morale, accidents, theft, substance abuse and loss of customers. However, there is an undiagnosed and growing crisis brewing in delayed retirement.
According to Prudential’s 2018 Financial Wellness Census, most Americans see saving for retirement as a top priority. However, the most common cause of stress is worrying that workers will not retire and will have to work for as long as they are able to do so. The fastest growing segments of the labor force are Americans 60-64 (5.0%), 65-69 (11.1%) and 70+ (8.8%). This increase in older workers is seen as a detriment to hiring younger Americans. How will delayed retirement factor into employers’ recruitment and talent engagement strategies?
This trend is being driven by an overall lack of confidence that older Americans have in their post-retirement readiness. The 2016 Employee Benefits Research Institute’s Retirement Confidence Survey showed
The ripple effects of delayed retirement and financial stress are deep, wide and growing. The good news for employers is that there are solutions (even some at no direct cost) to these stress-related issues that employers can implement today. Components of successful solutions include employee surveys, executive acknowledgement of the issues, their transparent support of the solutions, continuum of educational and counseling services as well as strategies architected based on individualized employees’ needs. Not addressing these concerns and putting off implementing supporting programs, could decrease productivity by as much as 20 hours worked per month or $915,000 per each 100 employees.
On the other hand, successfully tackling these issues can drive: