2014 employee-financial-stress-final

SHRM Survey Findings: Employee Financial Stress
In collaboration with and commissioned by
June 25, 2014

• 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.”
SHRM/Elevate: Employee Financial Stress ©SHRM 2014 2
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.
4%
34%
50%
10%
1%
Very good
Good
Fair
Poor
Very poor
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.
50%
29%
31%
46%
59% 60%
55%
34%
43%
57%
39%
30%
24%
17%
Employees
overall
0% 1%-20% 21%-40% 41%-60% 61%-80% 81%-100%
Percentage of Hourly Employees
Fair (n = 182) Good (n = 120)

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.
20%
50%
29%
20%
13%
4%
0%
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

Overall Employee Financial Literacy
Note: n = 391. Respondents who answered “don’t know” were excluded from this analysis.
13%
70%
17%
Very financially literate
Somewhat financially literate
Not at all financially literate
Organizations with fewer hourly
employees were more likely to have
rated employees as “very financially
literate,” whereas organizations
with more hourly employees were
more likely to have rated
employees as “not at all financially
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.
13%
62%
32%
15%
1%
6% 4%
70%
38%
61%
76%
80%
70%
62%
17%
0%
7% 9%
18%
24%
34%
Employees
overall
0% 1%-20% 21%-40% 41%-60% 61%-80% 81%-100%
Percentage of Hourly Employees
Very financially literate Somewhat financially literate Not at all financially literate

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.
Yes
13%
No
87%

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%
employees have approached
a manager or supervisor for
personal financial advice in
the last year.
53%
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.
12%
32%
13%
30%
13%
Strongly agree Agree Neither agree nor
disagree
Disagree Strongly disagree

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.
18%
19%
Payroll advances*
(n = 443)
Third-party provider loan product(s)
(n = 406)

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.
73%
17%
10%
55%
18%
27%
Positive impact
No impact
Negative impact
Third-party provider loan
products (n = 59)
Pay advances (n = 66)

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.
81%
42%
25%
8%
15%
47%
60%
84%
4%
10%
15%
8%
Retirement planning and consultation
Financial literacy training for investing
Financial literacy training for basic
budgeting
Credit score monitoring
Yes No No, but would consider offering

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.

employees?
Comparisons by organization staff size
500 to 2,499 employees (32%) > 1 to 99 employees (14%)
• 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%) >
• 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.

employees?
500 to 2,499 employees (54%) > 100 to 499 employees (32%)
• 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.
3%
20%
14%
18%
32%
12%
0%
1%-20%
21%-40%
41%-60%
61%-80%
81%-100%

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.
55%
19%
18%
5%
2%
Privately owned for-profit
Publicly owned for-profit
Nonprofit
Government
Other

Demographics: Organization Staff Size
Note: n = 388. Percentages do not equal 100% due to rounding.
27%
33%
19%
15%
7%
1 to 99 employees
100 to 499 employees
500 to 2,499 employees
2,500 to 24,999 employees
25,000 or more employees

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?

31
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

For more survey/poll findings, visit shrm.org/surveys
For more information about SHRM’s Customized Research Services, visit
shrm.org/customizedresearch
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About SHRM Research

Founded in 1948, the Society for Human Resource Management (SHRM) is the
world’s largest HR membership organization devoted to human resource management.
Representing more than 275,000 members in over 160 countries, the Society is the
leading provider of resources to serve the needs of HR professionals and advance the
professional practice of human resource management. SHRM has more than 575
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United Arab Emirates. Visit us at shrm.org.
About SHRM

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