Both employees and human resources executives are seeing the impact of personal financial stress on work productivity and performance during the coronavirus pandemic, according to a new survey by Morgan Stanley at Work.
While 82 per cent of employer respondents said they’re worried that personal financial issues are affecting employees’ work productivity, 64 per cent of employee respondents reported that financial stress is negatively affecting their work and personal life. This was particularly high among millennials, with 70 per cent citing higher financial stress compared to 61 per cent of generation X and 49 per cent of baby boomers.
In addition, the vast majority (91 per cent) of employees said they’ve faced personal financial issues during the pandemic. The top three financial issues cited were household budgeting (47 per cent), debt reduction (42 per cent) and emergency and short-term savings (30 per cent). In addition, 23 per cent of millennials reported having faced a full-blown financial crisis, compared with 17 per cent of gen Xers and eight per cent of boomers.
As a result, more than half (59 per cent) of employee respondents said they needed to reduce contributions to short- and long-term savings plans during the coronavirus pandemic, including contributions to 401(k) plans (29 per cent), long-term savings (28 per cent), emergency and short-term savings (25 per cent) and debt and loan repayments (25 per cent).
Among HR executives surveyed, 34 per cent said student loan repayment management is an essential benefit to help employees meet their personal financial goals, compared to 21 per cent of employee respondents.
“The pandemic has created negative financial consequences for employees across a myriad of industries, roles and personal situations,” said Brian McDonald, head of Morgan Stanley at Work, in a press release. “Yet, the crisis also produced an opportunity for employers, as employees are increasingly looking to the workplace for assistance with short and long-term financial needs like budgeting, managing debt, building emergency savings and planning for retirement.
“Given the financial hardships employees have faced over the pandemic, we are not surprised to see financial wellness tools evolve from nice-to-haves to necessities.”