According to a recent survey by Bank of America, American workers are recalibrating their financial priorities amid rising concerns about inflation outstripping wage growth.
The bank’s 13th annual Workplace Benefits Report titled “The Transforming Workplace” disclosed that 67% of employees feel that living costs are increasing faster than their salaries. This marks a substantial rise from the 58% reported in February 2022. Meanwhile, financial wellness among employees plunged to 42%, the lowest since the initiation of this study in 2010.
However, in a twist of optimism, over half of the workforce (56%) hold a cautiously positive outlook regarding their financial health over the coming two to three years.
Lorna Sabbia, the Head of Retirement and Personal Wealth Solutions at Bank of America, stated, “American workers continue to feel stressed about their finances and are concerned about keeping up with the cost of living.”
The report, which investigated workplace financial trends and wellness programs, unearthed a few concerning patterns:
- Shift in Financial Priorities: Workers are now giving precedence over immediate financial needs over retirement savings. The number of employees emphasizing long-term retirement funds dwindled from 45% in 2022 to just 31% this year. On the other hand, there’s a rise in those aiming to clear off credit card debts and accumulate savings for unforeseen expenses.
- Healthcare Concerns: Confidence in managing future healthcare expenses saw a dip, with 45% of respondents admitting they’re not actively saving for healthcare needs. Furthermore, only 7% intend to start contributing to Health Savings Accounts (HSAs).
- Gender Disparity in Financial Wellness: Women, in particular, are facing heightened financial stress, with just 38% feeling financially secure, a stark drop from 55% in 2022. Additionally, 54% of women worry about making ends meet due to inflation, contrasted with 32% of men.
- Financial Wellness Variations by Demographics: The study also found disparities in financial wellness sentiments across different ethnicities and locales.
Another focal point of the report was the impact of caregiving on employees. A significant 56% of workers identify as caregivers, with a majority unaware or not availing of the support resources provided by employers.
The evolving dynamics of the workplace was another key area of the report. It found that while a majority of employers currently operate in-person work models, there’s an impending shift towards hybrid and fully remote models in the foreseeable future.
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