According to the “2014 State of Employee Financial Stress” report by the Financial Finesse, a financial wellness services provider, the percentage of employees citing the economy and stock market as the main sources of financial stress decreased from 47% in 2012 to 43% in 2013. Instead, more employees are citing internal factors, such as not having control over their finances of thinking they will be unable to meet their future financial goals, as their main sources of financial stress.
The number of employees who reported concern about not being able to meet future financial goals as the main cause of their financial stress increased to 42% in 2013, compared with 35% in 2012.
Regardless of the source, the report shows in 2013, 23% of employees reported high or overwhelming levels of financial stress compared with 18% in 2012 and 19% in 2011.
“Now that the economy has stabilized for the most part, employees are taking the opportunity to assess their situations in more detail. They seem to recognize that they can no longer point to the stock market or the economy as the reasons for their discomfort. They are taking action to address their financial vulnerabilities through factors they themselves can control,” says Liz Davidson, CEO and founder of Financial Finesse, based in El Segundo, California.
This awareness appears to be stimulating more participation from employees in financial wellness programs. Greg Ward, Financial Finesse’s Think Tank Director, says the firm has seen a sharp increase in the number of employees that are running retirement calculations, taking financial wellness assessments, and attending one-on-one financial planning sessions with Financial Finesse Certified Financial Planner professionals.
According to Ward, utilization of these services among active clients rose 32% in 2013. In addition, employees are feeling more confident in their decisions after participating in the education. More than 90% say they feel more comfortable with their financial situations after participating in a one-on-one financial planning session.
With employers who are implementing financial wellness programs seeing success in improving employees financial behaviors, Davidson warns that employers who have workforces made up of employees facing significant levels of financial stress are at risk of increased health care and delayed retirement costs (see "Financial Wellness Not Just a Benefit for Employees").
Financial Finesse also found gender, age, income and the presence of minor children are primary indicators of financial stress among employees. High or overwhelming levels of financial stress were reported by 27% of women compared with 17% of men. Twenty-five percent of employees younger than 30, compared with 14% of those age 55 and older, reported such stress levels. More than one-third (37%) of those making less than $60,000 a year reported such stress levels, compared with 14% of those making more than $100,000 a year. Nearly three-in-ten (29%) employees with minor children reported such stress levels, compared with 19% of those without minor children.
An executive summary of the report can be found here.