FlexJobs and Prudential surveyed 1,100 FlexJobs members and found that 62% said they do not have enough emergency savings to last six months. Forty-six percent said their savings wouldn’t last three months, and 24% said it wouldn’t even last one month.
Fifty-three percent said they are earning half or less than half of their pre-pandemic income, and 31% have lost their entire income.
While 24% said they were struggling financially before COVID-19 hit, that has now jumped to 44%. Conversely, while 21% of workers felt financially secure before the crisis, that has now fallen to 10%, according to the survey.
Forty-four percent of survey respondents said they do not earn enough money to achieve their financial goals. Thirty-five percent say the high cost of living is their main barrier, and 26% say it is having too much debt. Fifteen percent said they do not have access to workplace benefits, such as paid time off or health insurance.
As to what employers that have cut employees’ pay can do to help their workers, Carol Cochran, vice president of people and culture at FlexJobs, said they could offer highly performing workers a bonus. For workers taking care of children or the elderly, employers could give them stipends, Cochran says.
To make ends meet, 84% of those surveyed said they are taking concrete steps to shore up their finances until the pandemic ends. Nearly half, 49%, are searching for additional income streams such as a side job, 28% have filed for unemployment and 23% have dipped into their emergency savings. Twenty percent have reduced their retirement contributions, and 8% have withdrawn money from their retirement account.
To help workers who have taken withdrawals or loans from their retirement plan, Cochran suggests employers increase their match.
As to what workers who have had their pay cut or who have lost their job altogether can do, Cochran says they should start by cutting their discretionary spending and establishing a new budget. “There may be a series of seemingly small places to make cuts that can add up to make a difference,” she says. “Call your credit card companies to see if a lower interest rate is available to you. If you have a mortgage, is refinancing a viable option? This can save a significant amount of money in the long run.”
And, for all workers, regardless of their current financial situation, Julie Brandon, vice president and head of financial wellness distribution at Prudential, said it is imperative that they start—or add to—their emergency savings.