Coronavirus and financial stress: how will employees react? They’re worried about losing pay, their jobs and being unable to afford the costs of healthcare if they’re infected with COVID-19.
Update: The number of coronavirus cases and deaths in the U.S. were updated as of April 13th, 2020.
There are more than 500,000 known cases of the new coronavirus, COVID-19, in the U.S. and over 20,000 people have died. Stores everywhere are selling out of hand sanitizer, face masks, groceries and household supplies as Americans panic about an outbreak reaching their neighborhood.
Employees, especially those in industries like hospitality, retail, healthcare and food service are fearful of what will happen if they’re infected with the coronavirus. Without the ability to work remotely, they worry about losing pay or their jobs while they’re quarantined.
“We’re seeing a significant number of employees register higher levels of financial stress in the past two weeks, which isn’t much of a surprise given the financial ramifications of catching coronavirus,” said Ilyce Glink, CEO of Best Money Moves.
More than 75 percent of employees live paycheck-to-paycheck. Nearly 40 percent couldn’t come up with $3,000 if an unexpected expense arose in the next month, according to a report by Willis Tower Watson.
One thing is clear: The coronavirus is heightening the financial stress employees experience every day, further damaging employee productivity and engagement.
Financial Stress and the Coronavirus: How Will Employees React?
“Financial health is not just about income. The impact of financial problems on employees’ health and stress, even for those who aren’t living paycheck to paycheck, is unmistakable,” said Steve Nyce, senior economist, Willis Towers Watson.
Money is a significant source of stress for 90 percent of employees, according to research by Thriving Wallet. More than 60 percent of employees feel as though their financial difficulties are piling up so much they can’t overcome them and 25 percent make purchases they later regret when experiencing financial stress.
Even a high salary doesn’t always salve financial woes — 18 percent of employees making more than $100,000 annually live paycheck to paycheck. Some employees are unable to pay for basic needs like healthcare, while others are having trouble saving for retirement.
And for employees who get sick, high-deductible healthcare plans have shifted much of the cost onto the shoulders of already struggling employees, who must find a way to come up with the initial costs of care for themselves and their families. (As of this writing, it’s unclear whether the US will shoulder the cost of testing for coronavirus, if insurance will cover it, or if employees themselves will have to pay that cost. Regardless, if an individual is forced to quarantine, the financial cost will be painful.)
Willis Tower Watson defines those who are “struggling” financially as those who live paycheck-to-paycheck and have difficulty controlling spending. Over 60 percent of those who are “struggling” aren’t fully engaged at work. Close to 40 percent said money concerns keep them from doing their best at work. More than 40 percent of “struggling” employees reported suffering from stress, anxiety or depression over the past two years, compared with just 16 percent of employees without financial worries.
Roughly 40 percent of Americans don’t have emergency savings and skip medical care they can’t afford. If those employees get sick, they might not get tested and come to work sick, infecting colleagues and limiting productivity.
How Financial Wellness Programs Pay Off
Even in a good economy, the majority of employees say financial stress is their top stressor. In a bad economy, that number grows exponentially.
A good financial wellness program can ease financial stress and help employees boost their financial wellbeing. Willis Tower Watson found nearly 70 percent of employees who were given access to four or more financial wellness tools said their finances are headed in the right direction. Over 60 percent of workers said those resources met their needs and encouraged them to improve their financial situation.
“We believe, with the right actions and insights, employers can help lower the financial risks that workers face. Access to the appropriate benefits and decision tools is a great start. These employer resources should include supportive social connections, such as coworkers and family, all of which can help employees keep and enjoy more of their money and, ultimately, improve wellbeing,” concluded Shane Bartling, senior director, Retirement, Willis Towers Watson.
Best Money Moves is a mobile-first financial wellness program with a wide range of tools to help employees measure financial stress and then dial it down. Our Stressometer measures stress in 14 categories and uses artificial intelligence to push relevant, contextualized and personalized information, tools, and solutions to users to solve the biggest pain points quickly.
We have a library of over 700 calculators, articles and videos, a budgeting tool that does the math, and tells workers what their neighbors are spending in the same category.
Best Money Moves is also gamified, it features a point-based rewards system where users earn points every time they log in, work with their budgets, read articles and measure their stress. Each point translates into a chance to win a monthly contest.
Sign up for a demonstration here to learn how Best Money Moves can bring financial wellness to your company.