THOUGHT LEADERSHIP

Connecting Wealth to Health in the Wellness Equation

Financial wellness is a bit of a conundrum. Its roots are in a person’s wallet, but when things go wrong, it can impact their health. As a result, employee benefit programs that don’t include a financial component may not be addressing a critical impediment to wellness.

People feel financial stress when they perceive that overall demands on their financial resources outweigh the supply. Financial wellness has become a priority among employers over the last several years because they realize that when their employees are financially stressed, employee productivity and health may suffer, impacting the organizations’ bottom line. John Hancock has calculated this cost to the employer, using data from its annual Financial Stress Survey—a poll of thousands of retirement plan participants. The company has determined that lost productivity and absenteeism due to financial stress cost an employer more than $2,000 per employee per year.

Employee financial stress hurts an employer’s bottom line.

  • 33% of workers worry about finances at work several times a week or every day
  • 47% spend an hour or more on personal finances at work
  • 43% would be more productive at work if they weren’t worried about personal finances

Financial stress on the rise despite improving finances

Even though personal financial situations have improved over the last five years, financial stress continues to rise. The portion of our participants who say their financial situation is good to excellent in 2018 is higher than it was in 2014 – and yet more people say finances cause stress now than five years ago. This seeming contradiction implies that financial stress is somewhat ubiquitous, in that it is felt by people at both the higher and lower ends of the income spectrum.

 

2014

2018

Participants who say their financial situation is good to excellent

55%

69%

Participants who experience financial stress

66%

69%



 

A majority of people in all income groups say that their finances add stress to their lives

Household income

Participants who say personal finances add stress to their lives

<$50,000

80%

$50,000-$99,000

74%

$100,000+

63%

 

Debt and inability to save cause a good deal of stress

Financial stress is a function of a person’s ability to manage the money coming in versus all the areas that need it. Top stressors are saving for retirement and emergencies, as well as paying off student loans. This suggests that most people are able to deal with the daily demands on their paychecks, but struggle with the longer-term demands.

Debt level and inability to save are the strongest indicators for stress, with income level ranking lower as a cause of stress. People with major debt and those who live paycheck to paycheck are far more stressed than others by monthly expenses and paying credit cards. And they are much more likely to experience symptoms of stress.

Six in ten people say they experience physical or psychological symptoms of financial stress, with the most common being:

  • Anxiety
  • Feeling overwhelmed
  • Lost sleep
  • Low energy
  • Nervousness
  • Headaches

Connecting wealth and health in the wellness equation

Conventional wisdom suggests that people who take care of themselves physically, get a good night’s sleep, and practice stress-reduction techniques feel fewer symptoms of stress. Sleep does seem to be an issue across the workforce, with only one-half of all respondents getting seven or more hours per night. And people with debt and who live paycheck to paycheck are getting less sleep than their less financially stressed coworkers.

That said, however, two-thirds of participants have a regular routine to reduce stress, including two-thirds of people who carry a high level of debt and live paycheck to paycheck. The most common stress reduction technique, by far, is exercise.

Yet, financial stress is pervasive, with two out of every three participants feeling its effects. The reason? John Hancock believes that while some symptoms of financial stress may respond to stress-reduction techniques, the stress itself won’t go away until the underlying financial issues are addressed.

To make matters worse, being financially unwell comes with a stigma. Most participants agree there is a social cost to feeling financially unwell, with 42% of all respondents reporting that the potential stigma would keep them from asking for the help they need to improve their situation.

Looking for holistic solutions at work

From health symptoms and work absences to perceived stigma, American workers are suffering from financial stress. Almost six in ten workers say that financial wellness resources at work would reduce their stress. All of this underscores the importance of including financial stress in an overall wellness assessment and plan. If you’re not offering employees the chance to take concrete steps toward financial wellness, you’re missing a key opportunity to help keep people on the job, fully productive, and motivated to take on new challenges.

John Hancock can help you integrate the benefits of financial wellness into your retirement plan program.

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In June 2018, John Hancock Retirement Plan Services sponsored our fifth annual Financial Stress Survey. Working with the respected research firm Greenwald and Associates, we surveyed more than 1,300 workers to learn more about individual stress levels, their causes and impacts, and strategies for relief.

The content of this document is for general information only and is believed to be accurate and reliable as of posting date but may be subject to change. John Hancock does not provide investment, tax, plan design or legal advice. Please consult your own independent advisor as to any investment, tax, or legal statements made herein.

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