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
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• 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)
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• 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?
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The State of Employee Financial Stress
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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.”
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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
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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%
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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.”
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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
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Financial Stress in the Workplace
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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%)
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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%
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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%)
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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%
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Financial Benefits: Pay Advances and Third-Party
Provider Loan Products
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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%
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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)
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Employee Financial Literacy and Employer-Sponsored Financial
Services
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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
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Does your organization currently offer the following services to its employees?
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.
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Does your organization currently offer the following services to its employees?
Note: Only statistically significant differences are shown.
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.
Comparisons by organization staff size
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.
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Does your organization currently offer the following services to its employees?
Note: Only statistically significant differences are shown.
Comparisons by organization staff size
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.
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Demographics
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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%
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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%
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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%
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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%
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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?
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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
SHRM/Elevate: Employee Financial Stress ©SHRM 2014 32
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