Jobs & Unemployment

Americans Just Want a Break. Employers Would be Smart to Help Them Make it Happen

By Dave Kilby, FinFit CEO

We have all seen the headlines. Employees are burned out; their attitudes have shifted when it comes to what they value most in their jobs and 55% of them are looking to find new, more fulfilling opportunities after a year of uncertainty. Nothing is a given anymore – salary is still one of the most important factors but survey after survey shows that employees are willing to take a pay cut if it means they will have greater flexibility to decide when and where they work. Some people want to work fully remote, while some want a hybrid option; with everything in flux it’s tough for businesses to set policies that attract and retain a wide variety of wants and needs.

To help businesses understand what benefits are most important to the American workforce right now, we analyzed surveyed data from over 87,000 employed Americans in August to learn how their goals might impact the way businesses shape HR and incentive programs over the coming years.

Despite the hot job market, over 61% of Americans are merely coping financially with 12% admitting they are financially vulnerable. But despite almost three-quarters of people not being on firm financial footing, most respondents (38%) still identify their top goal to save for a vacation – Boomers, Gen Xers, and Millennials alike. It’s in the data: Americans need a break. Ensuring they have the flexibility and ability to take time off so could go a long way for organizations in retaining talent.

Over 58% of people are working to pay down debt (credit cards, loans or student debt), which reflects the overall financial health of Americans. Almost 20% of Millennials, 17% of Gen X and 10% of Boomers could not make ends meet for more than a month if they lost their main source of income. Only a quarter of Millennials and Gen Xers could make it more than 6 months with their current savings; Boomers are more stable with almost 40% being able to weather long-term disruption. This makes sense as they are also the most likely to have more than $150K in savings based on our findings.

Just under half of those surveyed are prioritizing setting up savings and retirement accounts in the next 12 months, the pandemic reminding many of how quickly the economy can change or indicate a need to replenish stores after they dipped into saving accounts or halting saving to cover the difference between expenses and unemployment. If Americans had increased availability of funds, they might be in a more opportune position to invest in their future. Based on our data, most employees devote under 2% of their income to a 401(k) plan – 35% for Boomers, almost 43% for Gen X and almost 53% for Millennials.

Our research indicates overall savings have dangerously dwindled across the board; most employees have less than $10K in savings - over 66% for Millennials, over 54% for Gen X and 36% of Boomers. There’s a clear desire to improve saving habits, with 31% of employees identifying their top goal to establish an emergency fund. How can employers incentivize this behavior and provide support to help employees save so they have the means to build emergency savings, enjoy vacation time, plan for retirement, and ultimately prevent burnout and turnover? It will take far more than simply offering higher salaries.

Amazon recently announced it would cover 100% of college fees for its frontline workers, a move that according to our data could give them a hiring edge over competitors. 12% of Boomers, 15% of Gen Xers and almost 13% of Millennials are still saving to pay off student debt. Imagine the value of an investment account or emergency fund if workers could have pocketed the money spent on tuition and student loans. With almost a third of respondents prioritizing saving toward an emergency fund, they would have put this money to work for their future instead of paying off past debts.

Only 1 in 5 employees surveyed have no debt, Millennials being the most likely to report being debt free (29%) and Gen X mostly likely to report having far too much debt. In fact, Gen X is the most financially vulnerable regarding debt-to-income ratio, savings and the ability to pay bills on time. They are the most likely to be living paycheck to paycheck, also accruing the most new debt each month (52%) versus Millennials (51%) and Boomers (44%). They also reported having an unmanageable amount of debt (30%) vs 25% for Boomers and 24% for Millennials.

There’s a popular meme which pokes fun at the notion that after graduating high school, many Americans don’t know how to file their taxes but can tell you the mitochondria is the powerhouse of the cell. It seems financial literacy has fallen through the educational cracks and it is no laughing matter. Looking at the full financial health of these three generations and the impact of the pandemic still weighing on many, an important consideration isn’t just competitive pay but how employers can help their workers use their salary in the most effective way to improve their financial health and establish healthy habits. Financial education matters. Access to financial resources matters. Establishing savings matters. The financial health of your employees is on the line, and you can help. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.