Have you been overhearing your employees talking about living on ramen (not that there’s anything wrong with that) and refreshing the computer screen a hundred times a day to spot the exact moment that paycheck deposits? That may not come as a huge shock, but current worker struggles may be deeper and more common than you realize.
As we continue to experience the effects of a sluggish economy, many workers are struggling with household budgets. A whopping 61 percent of workers report they always or usually live paycheck to paycheck just to make ends meet, up from 49 percent last year and 43 percent in 2007, according to a new nationwide survey of more than 4,400 workers by CareerBuilder. Thirty percent of workers with salaries of $100,000 or more report that they too live paycheck to paycheck, up from 21 percent in 2008.
So, how are workers getting by?
- More than one in five (21 percent) workers say they have reduced their 401(k) contributions or personal savings in the last six months to get by. (Six-figure earners aren’t exempt, either; 23 percent report doing the same to make ends meet.)
- More than one-third (36 percent) of workers say they do not participate in any programs such as 401(k), IRAs or retirement plans at all, up from 31 percent in 2008.
- In addition, one-third (33 percent) report that they don’t put any money aside and into their savings each month, up from 25 percent in 2008
- Of those who do set money aside for savings, 30 percent set aside $100 or less per month and 16 percent save less than $50.
“Workers are employing a variety of tactics to help make ends meet in this economy,” said Rosemary Haefner, vice president of human resources for CareerBuilder.
“Whether it’s by keeping a tighter budget, finding ways to bring in additional income or adjusting their savings strategies, workers are doing their best to weather the current storm. These good financial habits will not only help workers in the short-term, but better position them for the future.”
But just because your employees are employing their own survival tactics doesn’t mean you don’t have a responsibility as an employer to do what you can to help. Haefner offers the following tips to help your employees ride out the economic downturn and prepare for the future (full tips here):
- Keep track of spending – Help employees create a spreadsheet to analyze what they spend each month, including the money spent on those inevitable invisible expenses, such as a morning coffee, cab rides or afternoon snacks. Once they can see where their money goes, they can more clearly see where they can cut back.
- Speak up – Set up a meeting with your employees and members of your HR department, in which employees can learn or be refreshed on what is available to help them save on monthly expenses. Is your company still offering flexible spending accounts, wellness benefits, retail discounts, transit reimbursement or anything else employees may not be aware of? An informal meeting in which employees can ask questions and clear up uncertainties may be extremely helpful for them.
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