No Match Found
With inflation hitting hard in 2023, employee financial stress is on the rise as they navigate higher prices, uneven wage growth and record credit card debt. While several of this year’s findings echo themes we’ve seen in the past, they underscore that now more than ever, employees are looking to their employers for help. Here’s our take on what’s top of mind for C-suite leaders and HR executives, plus how to guide your employees through uncertain economic times.
From the top: In PwC’s 26th annual global CEO survey, 52% of CEOs said their companies have begun cost-cutting measures as they attempt to reinvent their businesses amid global social and economic challenges from war to price inflation. CHRO and human capital leader insights from PwC’s Pulse Survey showed more than 80% of CHROs taking at least one action to reduce their workforces, including voluntary early retirement and layoffs.
Impact to employees: Organizational changes can cause employee stress, and our survey found that the top cause of stress is financial.
Sixty percent of full-time employees are stressed about their finances. This is slightly higher even than the number who were stressed about finances during the height of the pandemic. Even among employees earning $100,000 or more per year, nearly half (47%) are stressed about their finances. What’s more, financial stress impacts a wide range of employee health and well-being areas from mental health to sleep to self-esteem.
In the past year, financial stress and money worries have had a negative impact on...
From the top: In our CEO survey, three out of four CEOs predicted declining growth during the year ahead. In addition, more than 80% of CHRO and human capital leaders in PwC’s Pulse Survey were concerned about wage growth not keeping up with inflation and declining consumer purchasing power.
Impact to employees: Employees are increasingly feeling the impacts of inflation. Forty-four percent of full-time employees report that inflation has had a major or severe impact on their financial situation over the past year.
In a notable trend over the past few years, we find that the number of full-time employees who report that their compensation isn’t keeping up with the rising cost of living expenses has risen to 59%.
Against this backdrop, employees are having an increasingly hard time meeting basic expenses. Forty-nine percent find it difficult to meet household expenses on time each month (up from 41% last year). And among employees carrying credit card balances, 44% say they struggle to make minimum payments on time each month (up from 37% last year).
Twenty-eight percent of full-time employees often or always run out of money between paychecks, and even among those who earn $100,000 or more per year, 15% always or often run out of money between paychecks. Employees in the retail sector are most likely to report always or often running out of money between paychecks, at 39%, compared to 22% in manufacturing and 24% in the tech sector.
From the top: As reported in our CEO survey, CEOs anticipate that the struggle for talent will remain fierce. Our previous Pulse Survey also notes that hiring and retaining talent is a key investment area for CHROs, especially in a volatile job market where giving employees a reason to stay with their company is critically important.
Why should employers care about employees' financial well-being? Financially stressed employees tend to be more distracted, less engaged and more likely to seek another job.
Impact to employees: One in three full-time employees says that money worries have negatively impacted their productivity at work.
Personal finances have been a distraction at work...
Distractions add up and can cost employers productivity. Among financially stressed employees who are distracted at work because of their finances, 56% spend three hours or more per week at work dealing with or thinking about issues related to their personal finances.
Financially stressed employees are also more likely to leave. Only 54% feel there is a promising future for them at their employer, compared to 69% of employees who are not stressed about their finances. They are also twice as likely to be looking for a new job (36% of financially stressed employees compared to only 18% of non-financially stressed employees). And 73% of financially stressed employees say they would be attracted to another employer that cares more about their financial well-being compared to just 54% of non-financially stressed employees.
Percent who agree or completely agree:
The vast majority of employees want help with their finances. In especially uncertain economic times, it’s critical that employees have access to trustworthy, objective resources that aren’t capitalizing on product sales or retirement plan rollovers.
The good news is that the stigma around getting help with finances may be lifting. Employees overall are less likely to be embarrassed to ask for guidance or advice about their finances; just 33% say they find it embarrassing as compared to 42% in 2019.
Use of financial wellness benefits like coaching, workshops or webinars and online tools has grown: When we started this survey in 2012, just 51% of those who said their employer offered financial wellness services had used them, but now 68% report using the services their employers provide.
PwC conducted an online survey of 3,638 full-time employed US adults across a variety of industries in January 2023. This is the survey’s 12th year tracking the financial well-being of US employees.