Amid a tough labor market, it seems like layoffs have become an unavoidable part of an employee's career. But for women, the financial repercussions of finding themselves out of a job are potentially more dire than for their male colleagues.
Despite feeling more secure in their current roles, women are far less secure in their finances than men should they lose their job suddenly, according to a recent report from digital personal finance company Achieve, with 66% admitting to being financially unprepared for a layoff, compared to 54% of men, and 34% anticipating a recession.
"There is a lot of concern among women consumers," says Austin Kilgore, analyst at Achieve Center for Consumer Insights. "That's not to say that there isn't concern among male respondents, but it's an outsized level of concern for women of what's to come — and a lot of that has to do with a lack of confidence in the economy."
Read more: 'An uphill battle': Lack of diversity in the financial industry is hurting women long-term
Much of that distrust is due to the fact that women tend to be less financially prepared than men in general. Women were more likely than men to have little-to-no funds in their checking accounts, according to Achieve, and were less likely to have $5,000 or more in their bank accounts. Forty-five percent of women also reported zero emergency savings, compared to 32% of men, and 21% of women overdrafted their primary checking account or had less than $25 available in their account over the course of a month.
"It's understandable that there will be a lot of hesitation [for women] because their situation is a lot shakier than that of men to begin with," Kilgore says. "So a financial setback has the potential to have far greater consequences for people who are more vulnerable financially."
As for what's causing the discrepancy between men and women, Kilgore points to a few different drivers. First, the persisting gender pay gap continues to affect women's finances negatively. Women still earn 16% less than men on average, according to McKinsey, which makes building their savings considerably harder. Second, millions of women left their jobs during the pandemic, and although women's workforce participation has almost returned to pre-pandemic numbers, many women are still struggling to fully bounce back.
Despite their uncertainty, the data revealed that 84% report no plans to leave their current jobs in the next year and 80% do not feel that their current company is at risk for layoffs, but that doesn't mean employers shouldn't be making it easier for their female employees to achieve financial security.
Read more: The key to seeing more women in finance? Mentorship
"Financial wellness benefits are a huge area of opportunity for employers," Kilgore says. "Things like debt resolution programs are a low cost option to the employer, but can drive meaningful savings and financial improvement for employees that go beyond just salaries and traditional benefits."
Other options Kilgore urges organizations to consider include access to educational resources, tuition assistance programs, access to financial advisers and student loan repayment benefits. By doing so, employers are not just fostering more loyalty among their female employees in need of this support, but potentially boosting their productivity by minimizing the financial burden they're balancing on top of their daily responsibilities.
"There is of course a business incentive for employers to help their female employees address these issues," he says. "But frankly, if a company is in a position to help these women deal with financial pressures, it's also just the right thing to do."
