When Workers Are Financially Stressed, Everyone Pays the Price

Employees: 

62% of Americans live paycheck to paycheck
22% of workers have dipped into their emergency savings
69% of Americans say they have less than $1,000 in a savings account
49% of employees believe they’ll need to tap their retirement plans prior to retirement

Employers: 

43% of workers spend time on their personal finances while at work
55% of human resources professionals surveyed saw an increase in 401(k) withdrawals
Increased absenteeism (47%) and healthcare claims (41%) are two ways financial stress can affect an organization
For every dollar saved for retirement, at least 20 cents is withdrawn too early

Retirement Readiness: Not Just an Employee Issue, But a Business Issue

A workforce that is financially unprepared to retire can impact a business in a wide variety of ways. It is estimated that employers spend over $50,000 per employee each year the employee delays retirement. These costs include: 

• Potentially higher labor costs
• Increased healthcare premiums
• Lower productivity due to financial stress

The long-term financial impact to your organization of delayed retirement can be significant.

Estimated Cost to Employers of Delayed Retirement

100 person company with 3 employees delaying retirement:
1 Year = $150K; 3 Years = $450K; 5 Years = $750K

1,000 person company with 30 employees delaying retirement:
1 Year = $1.5M; 3 Years = $4.5M; 5 Years = $7.5M

10,000 person company with 300 employees delaying retirement:
1 Year = $15M; 3 Years = $45M; 5 Years = $75M

Given the implications, employers feel an even greater responsibility for their employee’s retirement readiness: 80% feel extremely or very responsible for helping employees prepare for retirement, compared with 22% in 2012. And 83% of employers now believe that employee financial wellness programs and tools help create a more productive, satisfied and engaged workforce.