Feeling stressed about finances isn't specific to any one age group, but Gen Z is having a particularly hard time keeping their heads above water, and it's starting to show at work.
Eighty-five percent of all employees are stressed about their finances, according to a recent survey conducted by financial wellness platform BrightPlan. This strain is not only causing workers to lose an average of seven hours of productivity at work each week, but 78% of leaders agree that financial stress is what led to higher turnover last year — and they're eager to keep it from affecting their young talent the same way.
"People are constantly adjusting to financial adversity and it is not slowing down," says Joe Vangsgard, the chief marketing officer at BrightPlan. "The growing list includes limited financial literacy, financial hardships post pandemic, growing loan debt, increasing interest rates, financial needs for life events and growing economic uncertainty."
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Employers are right to worry about the younger generation, Vangsgard says. Eighty-six percent of Gen Z are stressed about their financial situation, the survey found, and it's disproportionately affecting their engagement: Gen Z loses eight hours of productivity a week — an hour more than the average. Much of that has to do with the fact that young professionals are facing unprecedented challenges like student loan debt, earning less early in their career, finding or keeping a job with economic uncertainty, trying to buy a first home, starting a family, or having young children.
"Emerging professionals also have limited experience — if any — on how to navigate an economic downturn," Vangsguard says. "Financial literacy is the lowest for Gen Z, too, so they tend to leverage friends, family, co-workers and social media for financial advice, which often results in serious financial mistakes, further setting back their ability to manage their money and work toward building wealth."
A loss in productivity also directly translates to lost revenue as it could potentially cost organizations up to $183 billion annually, according to the survey. And while 92% of leaders say their company offers employees the financial guidance, support and tools they need to achieve their life goals, just 56% of workers agree. In fact, 76% of employees surveyed are not satisfied with their company's current financial benefits package.
As a result, financial preparedness among employees is also strikingly low. Thirty-eight percent report having no emergency savings or only enough for up to 2 months, 42% report unmanageable debt and nearly half report saving either nothing at all or less than 10% of their income for retirement. Should they let their employees' financial concerns go unaddressed, employers put their future recruiting and retention efforts at risk.
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"Finances are deeply personal, and financial stress can show up in everything we do, including bringing our best and most productive selves to work," Vangsgard says. "This is why we need employers to lean in more than ever and support their employees with financial wellness strategies and programs."
While employees are attempting to adjust —88% are reassessing their financial habits, 83% are budgeting and saving more and 75% are cutting expenses — not all of those methods are sustainable. For example, 30% of employees are working extra hours just to boost their savings. To keep their workforce — especially young talent — from burning out, organizations should be leveraging HR surveys and assessments with their workforce to determine the impact, need and expectation of financial resources for their employees.
"Start by acknowledging that this reality does affect your organization and seek to understand in more particular detail how financial stress is impacting your employees," Vangsgard says. "Sometimes simply asking these questions directly while providing safe and open places for discussion can help uncover the true impact on employees."
