2014 employee-financial-stress-final

SHRM Survey Findings: Employee Financial Stress

In collaboration with and commissioned by

June 25, 2014

SHRM/Elevate: Employee Financial Stress ©SHRM 2014 2

• How do HR professionals rate the overall financial health of their employees? Roughly three-fifths (61%) of HR professionals consider their overall employees’ financial health to be no better than fair (50% fair, 10% poor and 1% very poor), and 38% describe it as “very good” or “good.” Organizations with greater proportions of hourly employees were more likely to indicate that their employees’ overall financial health was "fair," whereas organizations with fewer hourly workers reported better financial health among staff.

• What age group is most likely to experience financial stress? Fifty percent of HR professionals indicate that people in the 25-34 age range experience the most financial stress. Twenty-nine percent of HR professionals reported employees between 35 and 44 years as the age group to experience the most financial stress.

• How financially literate are employees? The majority (70%) of HR professionals report employees as being “somewhat financially literate.” Thirteen percent describe their employees as “very financially literate,” but 17% are considered to be “not at all financially literate.” Organizations with a smaller proportion of hourly employees were more likely have employees rated as “very financially literate,” whereas organizations with a greater proportion of hourly employees were more likely to have employees rated as “not at all financially literate.”

Key Findings


• What financial benefits do organizations offer their employees? Nineteen percent of organizations offer employees loan products from a third-party provider, and 18% of organizations offer payroll advances.

• What impact do financial benefits have on employees’ overall ability to manage their financial difficulties? Nearly three-quarters of HR professionals indicated that offering third-party provider loan products has a positive impact on employees’ overall ability to manage their financial difficulties, and slightly over one-half of HR professionals reported pay advances having a positive impact.

• What types of services are organizations offering to help employees manage their finances? The most common financial services that organizations offer employees are retirement planning and consultation (81%) and financial literacy training for investing (42%). Less prevalent financial services include financial literacy training for basic budgeting (25%) and credit score monitoring (8%).

Key Findings (continued)


• Employees’ struggling to gain control of their finances may have significant ramifications in the workplace. A combined 61% of HR professionals describe the overall financial situation of their employees as no better than fair (50% fair, 10% poor and 1% very poor), signaling that financial issues could be a growing challenge for employees in many workplaces. Anxiety related to finances could be a growing source of employee stress that has a direct impact on health care costs, absence and productivity. Thus money management strategies, including budgeting and investing, may increasingly be considered as a part of workplace stress management and wellness initiatives.

• Undoubtedly, one major area of discussion for organizations will involve employees’ compensation. Though wages have not grown significantly in recent years, high levels of financial stress could eventually give way to greater wage pressure, especially for jobs that are difficult to fill. In addition, increased financial stress among the rank and file could influence the debate on executive compensation.

• Organizations may want to reevaluate their benefits program to fit the needs of their staff. HR professionals report that a portion of Millennials are the employees most likely to experience financial stress in their organizations. Demographic differences in the financial challenges of employees could potentially be a source of intergenerational tension or conflict and could affect how financial benefits are tailored to different age groups within the workplace.

What do these findings mean for the HR profession?


The State of Employee Financial Stress


Overall Employee Financial Health

Note: n = 383. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not equal 100% due to rounding.

Very good

Good

Fair

Poor

Very poor

4%

34%

50%

10%

1%

Organizations with greater proportions of hourly

employees were more likely to indicate that their employees’

overall financial health was “fair.”

Organizations with fewer hourly workers were more

likely to rate their employees’ financial health

as “good.”


Employee Financial Health Rating: Fair and Good Ratings(by percentage of hourly employees)

Note: Respondents who answered “don’t know” were excluded from this analysis.

Employees overall

0% 1%-20% 21%-40% 41%-60% 61%-80% 81%-100%

50%

29% 31%

46%

59% 60%55%

34%

43%

57%

39%

30%24%

17%

Fair (n = 182) Good (n = 120)

Percentage of Hourly Employees


Most Financially Stressed by Age

Note: n = 409. Respondents who answered “don’t know” were excluded from this analysis. Percentage do not equal 100% due to multiple response options.

18-24 years of age

25-34 years of age

35-44 years of age

45-54 years of age

55-64 years of age

65-74 years of age

75 years of age and over

20%

50%

29%

20%

13%

4%

0%


Overall Employee Financial Literacy

Note: n = 391. Respondents who answered “don’t know” were excluded from this analysis.

Very financially literate

Somewhat financially literate

Not at all financially literate

13%

70%

17%

Organizations with fewer hourly em-ployees were more likely to have rated employees as “very financially liter-

ate,” whereas organizations with more hourly employees were more likely to have rated employees as “not at all fi-

nancially literate.”


Employee Financial Literacy (by percentage of hourly employees)

Note: n = 378 Respondents who answered “don’t know” were excluded from this analysis. Percentages may not equal 100% due to rounding.

Employees overall

0% 1%-20% 21%-40% 41%-60% 61%-80% 81%-100%

13%

62%

32%

15%

1%6% 4%

70%

38%

61%

76%80%

70%62%

17%

0%7% 9%

18%24%

34%

Very financially literate Somewhat financially literateNot at all financially literate

Percentage of Hourly Employees


Financial Stress in the Workplace


Financial Stress and Employee Absenteeism

Note: n = 352-396. Only respondents who answered “strongly agree” and “agree” are shown. Respondents who answered “don’t know” were excluded from this analysis. Only statistically significant differences are shown.

59% HR professionals agree that employees at their

organization have missed work due to transportation

issues in the last year.

37% HR professionals agree that employees at their

organization have missed work due to a financial emergency in the last

year.

Larger organizations are more likely than smaller

organizations to agree that their employees have missed

work due to a financial emergency in the past 12

months.500 to 2,499

employees (40%)1 to 99 employees

(17%)


Employee Termination Due to Employee Financial Issues

Note: n = 189. Respondents who answered “”I’m not sure, but I don’t think so,” “I’m not sure, but I believe yes” or “don’t know” were excluded from this analysis.

Yes13%

No87%


Employees Seeking Assistance from Their Employer

Note: n = 349-374. Only respondents who answered “strongly agree” and “agree” are shown. Respondents who answered “don’t know” were excluded from this analysis. Only statistically significant differences are shown.

47% HR professionals agree that employees have

approached a manager or supervisor for personal

financial advice in the last year.

53% HR professionals agree that employees have

approached a representative of the

organization asking for a pay advance in the last

year.

Larger organizations are more likely than smaller

organizations to agree that their employees have

approached a representative asking for a pay advance in

the past 12 months. 500 to 2,499 employees

(63%)1 to 99 employees (25%)

100 to 499 employees (34%)


Organizations Providing Annual Cost-of-Living Raises to Employees to Keep Up with Inflation

Note: n = 416. Respondents who answered “don’t know” were excluded from this analysis.

Strongly agree Agree Neither agree nor disagree

Disagree Strongly disagree

12%

32%

13%

30%

13%


Financial Benefits: Pay Advances and Third-Party

Provider Loan Products


Does your organization offer the following financial benefits?

Note: Respondents who answered “don’t know” were excluded from this analysis. Only respondents who answered “yes” are shown. An asterisk (*) indicates that these data were taken from the SHRM 2014 Employee Benefits Report.

Payroll advances*(n = 443)

Third-party provider loan product(s)(n = 406)

18%

19%


What impact does offering financial benefits have on the overall ability of employees at your organization to manage their financial difficulties?

Note: Only respondents whose organization offers loan product(s) from a third-party provider and/or pay advances as employee benefits were asked this question. Respondents who answered “don’t know” were excluded from this analysis.

Positive impact

No impact

Negative impact

73%

17%

10%

55%

18%

27%

Pay advances (n = 66) Third-party provider loan products (n = 59)


Employee Financial Literacy and Employer-Sponsored Financial

Services


Does your organization currently offer the following services to its employees?

Note: n = 398-405. Respondents who answered “don’t know” were excluded from this analysis. Percentages may not equal 100% due to rounding.

Retirement planning and consultation

Financial literacy training for investing

Financial literacy training for basic budgeting

Credit score monitoring

81%

42%

25%

8%

15%

47%

60%

84%

4%

10%

15%

8%

Yes NoNo, but would consider offering



Note: Only statistically significant differences are shown.

Comparisons by organization sector

Publicly owned for-profit (39%) > Privately owned for-profit (17%)

Comparisons by organization sector• Publicly owned for-profit organizations are more likely than privately owned for-profit organizations to

offer their employees financial literacy training for basic budgeting.




Comparisons by organization staff size

500 to 2,499 employees (32%) > 1 to 99 employees (14%)

Comparisons by organization staff size• Organizations with 500 to 2,499 employees are more likely than organizations with 1 to 99 employees

to offer their employees financial literacy training for basic budgeting.


2,500 to 24,999 employees (41%) > 1 to 99 employees (14%) 100 to 499 employees (15%)

• Organizations with 2,500 to 24,999 employees are more likely than organizations with 1 to 499 employees to offer their employees financial literacy training for basic budgeting.





500 to 2,499 employees (54%) > 100 to 499 employees (32%)

Comparisons by organization staff size• Organizations with 500 to 2,499 employees are more likely than organizations with 100 to 499

employees to offer their employees financial literacy training for investing.


Demographics


Approximately what percentage of your organization’s employees are paid hourly?

Note: n = 395. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not equal 100% due to rounding.

0%

1%-20%

21%-40%

41%-60%

61%-80%

81%-100%

3%

20%

14%

18%

32%

12%


Demographics: Organization Industry

Note: n = 396. Percentages do not equal 100% due to multiple response options.

Percentage

Manufacturing 25%Professional, scientific and technical services 20%Health care and social assistance 11%Finance and insurance 9%Educational services 9%Government agencies 6%Administrative and support and waste management and remediation services 5%Retail trade 5%Transportation and warehousing 5%Information 5%Accommodation and food services 4%


Demographics: Organization Industry (continued)

Note: n = 396. Percentages do not equal 100% due to multiple response options.

Percentage

Construction 4%Repair and maintenance 3%Utilities 3%Wholesale trade 3%Real estate and rental and leasing 3%Religious, grant-making, civic, professional and similar organizations 3%Mining, quarrying, and oil and gas extraction 3%Arts, entertainment, and recreation 2%Agriculture, forestry, fishing and hunting 2%Personal and laundry services 1%Other industry 4%


Demographics: Organization Sector

Note: n = 391. Percentages do not equal 100% due to rounding.

Privately owned for-profit

Publicly owned for-profit

Nonprofit

Government

Other

55%

19%

18%

5%

2%

29

Demographics: Organization Staff Size

SHRM/Elevate: Employee Financial Stress ©SHRM 2014

Note: n = 388. Percentages do not equal 100% due to rounding.

1 to 99 employees

100 to 499 employees

500 to 2,499 employees

2,500 to 24,999 employees

25,000 or more employees

27%

33%

19%

15%

7%


n = 408

Demographics: Other

U.S.-based operations only 72%

Multinational operations 28%

Single-unit organization: An organization in which the location and the organization are one and the same.

27%

Multi-unit organization: An organization that has more than one location. 73%

Multi-unit headquarters determines HR policies and practices. 58%

Each work location determines HR policies and practices. 4%

A combination of both the work location and the multi-unit headquarters determines HR policies and practices.

38%

Is your organization a single-unit organization or a multi-unit organization?

For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both?

Does your organization have U.S.-based operations (business units) only, or does it operate multinationally?

n = 406

n = 308

Corporate (companywide) 69%

Business unit/division 16%

Facility/location 15%n = 309

What is the HR department/function for which you responded throughout this survey?


SHRM Survey Findings: Employee Financial Stress

• Response rate = 14%• 419 HR professionals from a randomly selected sample of SHRM’s membership

participated in this survey• Margin of error +/-5%• Survey fielded May 9-June 2, 2014

In collaboration with and commissioned by

Survey Methodology


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