At first glance, employees appear to be doing well. Their financial stress levels have been declining steadily since the first quarter of 2010. A special report released Thursday by Financial Finesse, though, finds that employees may be getting too complacent and that these lower stress levels are actually dangerous.
One giant red flag, according to the report, is that of the 16% of employees who report having no financial stress, 68% also report being unprepared for retirement. A majority don't have a will or trust established and only half say they have enough life insurance to protect their family.
Employees aren't completely stress free. Sixty-eight percent say they have at least some financial stress, while 16% say their stress is either high or overwhelming.
One tool that employers have recently started adopting to help their employees with financial problems is a financial wellness assessment, Linda Robertson, a senior financial planner at Financial Finesse, told AdvisorOne on Thursday. Similar to a health assessment in a wellness program, a financial wellness assessment can help "nip a problem in the bud and spot vulnerabilities before the employee feels it."
In its first-quarter trend report, Financial Finesse noted that employees' overall financial wellness was in decline. In the first quarter of 2012, two-thirds of employees said they had a handle on their cash flow and spent less than they make every month, down from 72% last year. Fewer employees are paying off their credit card balances in full, and fewer have an emergency fund to turn to if they lose their jobs. Last year, 88% of employees said they pay their bills on time every month. That fell to 85% in the first quarter of 2012.
For those who struggle with reasonable amounts of stress, external factors like the stock market and the economy are the major sources. However, for employees who reported high or overwhelming levels of stress, internal factors weigh heavily on their minds. The main causes of their stress are feeling that their financial situation is out of control or that they won't meet their financial goals.
