A new report from emergency savings startup SecureSave reveals that US employees are struggling to save for unexpected short-term needs due to a lack of emergency savings, with 63% of employees unable to cover a $500 emergency expense. SecureSave's research revealed employee financial stress is a significant contributor to diminished productivity and job dissatisfaction, and it has a negative impact on employers, who collectively lose a staggering $4.7 billion per week in productivity because of it.
KIRKLAND, Wash., Aug. 17, 2023 /PRNewswire-PRWeb/ -- The stress caused by financial problems costs U.S. companies $4.7 billion per week but 66% feel uncomfortable seeking help from their employers for unexpected expenses
9 out of 10 employees want employer-matched emergency savings accounts (ESA) and 4 of 10 employees prefer an employee-matched emergency savings account over a 401K plan
A new report from emergency savings startup SecureSave reveals that US employees are struggling to save for unexpected short-term needs due to a lack of emergency savings, with 63% of employees unable to cover a $500 emergency expense.
SecureSave's research revealed employee financial stress is a significant contributor to diminished productivity and job dissatisfaction, and it has a negative impact on employers, who collectively lose a staggering $4.7 billion per week in productivity because of it.
A financial emergency affected one in three workers over the last six months, resulting in lower work performance and dissatisfaction with their current employer
SecureSave's study, which polled 1600 employees, revealed that one-third of the respondents had faced financial emergencies in the past six months, leading to significant negative effects on their work performance and increased job dissatisfaction.
Furthermore, the study indicated that 44% of all participants have intentions to seek alternative employment within the next six months. Specifically, 55% of Millennials (born between 1981 and 1996) and 63% of Gen Z (born between 1997 and 2012) are among those planning to search for new job opportunities within the same timeframe.
64% of employees earning over $100K said financial stress has affected their productivity at work; 35% reported living paycheck-to-paycheck
Even among employees earning an annual household income of $100,000 or more, 35% admitted to living paycheck-to-paycheck, and a concerning 64% reporting that financial stress has affected their productivity at work.
4 out of 5 employees are unable to cover a single month's worth of expenses if faced with an emergency expense
Despite experts' advice to maintain 8 to 12 months' worth of living expenses in an emergency savings fund, a staggering 76% of respondents currently lack sufficient savings to cover even a single month's worth of expenses in case of an emergency.
6 out of 10 employees would be unable to cover a $500 emergency expense
If faced with an unexpected $500 emergency expense like a hospital bill or car repair, 6 out of 10 employees would be unable to cover it. Nearly 1 out 5 would have to ask a friend or family member for money (19%) or put it on their credit card and pay over time (18%). Only 4% would ask their employer for help.
Despite the impact on work performance, employees don't want to talk to employers about their financial stress
Despite the clear implications of financial stress in the workplace, 66% of employees feel uncomfortable seeking help from their employers for unexpected expenses. This hesitation could further exacerbate financial challenges for employees.
Employees wants an emergency savings account over an HSA and financial wellness coaching
The report underscores the critical need for employers to set up and offer a solution, with 90% of employees expressing interest in an employer-matched ESA benefit, up from 87% in a November study from SecureSave.
The study also found 4 of 10 employees also said they'd prefer an employee-matched emergency savings account over a 401K plan.
5 out 10 of Millennials and Gen Z responded that they'd prefer an ESA over a 401K.
When considering a new job, 44% said an employer-matched Emergency Savings Account (ESA) would be the most compelling benefit, surpassing surpassing other popular benefits such as a matched Health Savings Account (HSA) at 31%, mental health support (8%), student loan repayment (7%) and financial wellness coaching (6%.)
This supports a previous report from T. Rowe Price that found 73% of employees wanted emergency savings as a workplace benefit.
The solution: how employers can help
The enactment of the SECURE 2.0 Act of 2022's provisions on emergency savings and the launch of new e-savings products among employers have made employee emergency savings a priority within workplace benefits programs. Employers like Starbucks, Blackrock, and ADP have added emergency savings to their roster of employee benefits.
"The lack of emergency savings has become a billion dollar problem for employers and a serious problem for employees," said Suze Orman, Co-Founder, SecureSave. "Employer-sponsored emergency savings accounts are now the number one benefit that employers need to offer and time is of the essence."
The average SecureSave user saves an average of $98 a month toward an ESA, reaching $400 after four months of saving.
"Emergency funds are the top choice of nearly half of employees as a new benefit option," said Devin Miller, CEO + Co-Founder, SecureSave. "With benefits season upon us, we hope employers will listen to employees as they make investments for 2024. Employees want emergency funds above all else."
Through SecureSave's platform, employees can set up free emergency personal savings accounts through the ease of payroll deductions, receive matched contributions from their employer and access their money whenever they need it. To learn more about the company, visit https://www.securesave.com.
About SecureSave: SecureSave is a financial technology platform designed to help individuals build emergency savings through an employer benefits platform. It was co-founded by Devin Miller, Bassam Saliba, and Suze Orman, who realized that emergency savings needed to be easier and more accessible to help solve the growing savings crisis in the US. Through SecureSave's platform, employees can set up free emergency personal savings accounts through the ease of payroll deductions, receive matched contributions from their employer and access their money whenever they need it. The average SecureSave user saves an average of $103 a month toward an emergency savings account. To learn more about the company, visit https://www.securesave.com.
Survey methodology: This survey was conducted online within the United States by Centiment on behalf of SecureSave among 1600 U.S. adults ages 18 and older.
Media Contact
Tanya Gillogley, SecureSave, 1 206.666.4900, [email protected], https://www.securesave.com/
SOURCE SecureSave
Share this article