New research on employee sentiment shows significant declines in employee satisfaction and commitment to their employers since last year, most noticeably with regard to compensation, work/life balance, benefits and career goals.
HR consultancy Mercer's 2022 Inside Employees' Minds study found that concerns over inflation have made financial health employees' greatest unmet need, based on a survey of 4,049 full-time employees in the U.S. at organizations with more than 250 employees. The survey was conducted between Aug. 26 and Sept. 9, 2022.
The top three factors that would cause respondents to consider leaving their employer were:
- Insufficient pay. Nearly 1 in 3 employees making less than $60,000 per year said they've taken on additional work to supplement their income, the survey showed.
- Burnout due to a demanding workload. More than half (51 percent) of employees reported feeling exhausted during a typical day at work.
- Insufficient health care benefits. Sixty-eight percent of employees reported challenges with getting the care they need, with the top challenge being trouble affording costs not covered by health plans, such as deductibles and co-pays.
Concerns about physical health declined somewhat this year as health and safety measures at work and the threat posed by COVID-19 have improved, although physical health still was a top concern overall (No. 4, down from the No. 1 spot last year).
Making Ends Meet
"During the pandemic, organizations led with empathy and prioritized health and flexibility," said Adam Pressman, Mercer's U.S. employee research leader. "But 2022 has brought new challenges—inflation, labor shortages, a war in Ukraine and more."
Low-income employees whose pay raises have not kept pace with inflation are struggling, Pressman said, as pay levels often fall below living expenses.
"Others, who have their basic financial needs met, are placing increased importance on their lives outside of work," he noted.
Additionally, fewer than half of respondents feel confident they can turn their retirement savings into a steady retirement income. When asked what changes they would value most in retirement benefits, employees overall chose an increase in the contribution amount matched by their employer.
Employees under 45, who are less likely to have discretionary income to contribute to their retirement plan, would value matching payments made to student loan debt and contributions to a health savings account.
"In 2022, employees value a workplace that centers on well-being, where they have more-sustainable workloads and more resources to support their holistic health—financial, physical, and mental," said Lauren Mason, senior principal for Mercer's career business practice. "We see this as a defining moment, a new contract between employers and employees. Employers who adopt this lifestyle contract will gain a committed and productive workforce and be an employer of choice in today's job market."
Another recent survey highlights how inflation is affecting employees' ability to pay for benefits.
Nationwide Retirement Institute, an insurance and financial services organization, polled 1,140 U.S. adults ages 18 and older, from Aug. 26 to Sept. 8, 2022.
Among the findings, 10 percent of respondents had decreased their retirement plan contributions in the past year to pay for health care expenses due to high inflation. Another 14 percent of adults were considering decreasing their contributions this year, a number that was higher for Generation Z (21 percent) and Millennials (20 percent).
To find additional savings, 14 percent of respondents said they were considering downgrading their health insurance plan because of high inflation, a number that rose among members of Generation Z (23 percent) and Millennials (20 percent).
As people struggle to pay for critical health care expenses, many said they had canceled or postponed plans in the past 12 months to see a specialist (14 percent), take a prescribed medication (10 percent) or get an annual physical (11 percent).
"As the price of health care and basic necessities continue to reach record highs, Americans have been forced to make tough decisions that sacrifice their health and well-being," said Kristi Rodriguez, senior vice president of Nationwide Retirement Institute. "While these decisions are understandable and challenging, making short-term trade-offs may have long-term impacts," leading to higher costs as people age.
The Society for Human Resource Management's 2022 Employee Benefits survey of over 3,000 HR professionals, conducted earlier this year, found just under half (49 percent) of respondents' organizations offered retirement planning or investment advice online to a group/classroom or one on one.
Given workers' desire for this type of support, offering financial advice on matters such as saving, budgeting and retirement investing can increase retention and improve employee well-being.
Related SHRM Article:
Employers Are Feeling Employees' Financial Pain, Enhancing Benefits, SHRM Online, October 2022