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More Workers Living Paycheck to Paycheck, CareerBuilder Survey Finds

ramenHave 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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Amy Chulik

About Amy Chulik

Originally hailing from Ohio, Amy is a content strategist on the Marketing and Communications Team who has been with both CareerBuilder and the city of Chicago for more than seven years. She writes on a range of recruitment topics on The Hiring Site, striving to bring a dose of clarity and humor to sometimes complicated issues around employee attraction, engagement and retention. In addition, she writes and edits content for the CareerBuilder website as well as CareerBuilder e-books, white papers, emails, marketing campaigns, and anything else that's thrown her way. She is also the voice of @cbforemployers on Twitter. When she's not working, Amy spends as much time as possible reading, writing short stories, eating Nutella out of the jar, waiting for CTA buses and trains, going to see her favorite bands live, dreaming up new adventures, and spending time with people who inspire and challenge her.
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Audi Ritz

Another resource available to employers to help employees ride out the economic downturn and prepare for the future is referral to credit counseling agencies for financial education. Research has linked financial education and credit counseling to improved employee health, work performance and attendance (Research Works Volume 1, Issue 1, Feb 2009).

As the HR Manager of one of the nation’s largest nonprofit credit counseling agencies, American Financial Solutions, I highly recommend these services to be offered to your employees. These services are often free or at a low cost to your employees.

Certified credit counselors offer employee’s sound financial advice and solutions that fit their individual needs and lifestyle that may address, paying off credit card, medical and other debt, threatened mortgage foreclosure, or counseling prior to filing for bankruptcy. On site or off site workshops are also offered to promote financial education and to help employees to better manage their money.

It is imperative to select a legitimate credit counseling agency that counsels and financially educates thousands of consumers each year and is a member of a national body such as the Association of Independent Consumer Credit Counseling Agencies (AICCCA). AICCCA requires strict quality, financial and ethical standards for its members and serves as a referral source of quality.

Audi Ritz, SPHR
Human Resources Manager
American Financial Solutions
www.myfinancialgoals.org
800.282.5492

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JanieGraham
JanieGraham 5 pts

It's so bad that people are living paycheck to paycheck nowadays. It's very important to save, especially in this economy. You just don't know what is going to happen. If you are in debt, I would encourage using a non profit debt consolidation company to help alleviate your payments and make paying off your debt more affordable so you don't have to declare bankruptcy. You kind find a good one at http://www.ffef.org - Janie

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Danny Fitz

I agree that if you're employees are under financial distress their productivity will go down as well as their overall well-being.

I think it's a great idea for an employee to give a referral to a credit counseling agency if he's having some sort of financial hardship. I work for a certified credit counselor, www.christiancreditcounselors.org and I know that we have worked in partnership with employers when they are experiencing employees that are experiencing credit card problems.

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Audi Ritz

Another resource available to employers to help employees ride out the economic downturn and prepare for the future is referral to credit counseling agencies for financial education. Research has linked financial education and credit counseling to improved employee health, work performance and attendance (Research Works Volume 1, Issue 1, Feb 2009).

As the HR Manager of one of the nation’s largest nonprofit credit counseling agencies, American Financial Solutions, I highly recommend these services to be offered to your employees. These services are often free or at a low cost to your employees.

Certified credit counselors offer employee’s sound financial advice and solutions that fit their individual needs and lifestyle that may address, paying off credit card, medical and other debt, threatened mortgage foreclosure, or counseling prior to filing for bankruptcy. On site or off site workshops are also offered to promote financial education and to help employees to better manage their money.

It is imperative to select a legitimate credit counseling agency that counsels and financially educates thousands of consumers each year and is a member of a national body such as the Association of Independent Consumer Credit Counseling Agencies (AICCCA). AICCCA requires strict quality, financial and ethical standards for its members and serves as a referral source of quality.

Audi Ritz, SPHR
Human Resources Manager
American Financial Solutions
www.myfinancialgoals.org
800.282.5492

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Paul Chicos

E-Duction offers a guaranteed-issue, interest-free, payroll-deduction credit card helping employees better manage daily expenses

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Trackbacks

  1. Do Employers Pay the Price For Employees’ Financial Woes? | The Hiring Site says:
    September 1, 2010 at 9:53 am

    [...] check out what other companies are doing: When we released this survey last year, we asked readers to weigh in and tell us how their company was helping employees weather the rough [...]

  2. Only Bangalore Jobs » Blog Archive » Do Employers Pay the Price For Employees’ Financial Woes? says:
    September 1, 2010 at 2:27 pm

    [...] check out what other companies are doing: When we released this survey last year, we asked readers to weigh in and tell us how their company was helping employees weather the rough [...]

  3. Freshers Yaar! » Blog Archive » Do Employers Pay the Price For Employees’ Financial Woes? says:
    September 1, 2010 at 6:56 pm

    [...] check out what other companies are doing: When we released this survey last year, we asked readers to weigh in and tell us how their company was helping employees weather the rough [...]

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