3 ways to manage money stress

FINANCIAL STRESS: Is employees’ money stress spiraling out of control? The weight of immediate financial concerns like debt and student loan payments, paired with a concern around long-term retirement preparedness is leaving employees feeling overwhelmed around their financial well-being. According to a new report from SoFi , 86% of employees say they are stressed about their finances, up 10% from last year. 

“When almost all employees say they’re stressed about finances, it’s time for employers to listen — or risk it negatively impacting their company’s bottom line,” says Michael Bourgeois , vice president and business lead at SoFi. “HR leaders need to ensure employees understand the long-term tradeoffs and don’t lose sight of future financial well-being. It’s essential to offer a holistic benefits package designed to meet employees at all stages of life.”   

Here's what's working to help employees with their money stress: 86% of employees are stressed about money: Why your financial wellness benefits may be failing

PENSIONS: Employers are increasingly expanding the options available to help employees save for retirement. But what are they doing to help employees spend those funds responsibly once they leave the workplace? In 2023, just 19% of employees participated in a pension plan, according to data from the Bureau of Labor Statistics. Pensions, also known as defined benefit plans, provide a set monthly payment for life, an increasingly appealing benefit as employees approach retirement with a lack of education around how to spend down their savings. 

"Over the last 20 years, if not more, we've been getting people to save and invest, with mixed results," says Mindy Zatto, FSA, EA, FCA, MAAA, MSPPA , founding principal at Strategic Benefits Advisors, Inc. "Now that we have all these people retiring, the question now is, how are they going to figure out how to spend it? And we've essentially given all of that responsibility to individuals."

Zatto predicts whether pensions will come back this year, and why that's a good thing: Are pensions set for a big retirement return in 2024?

CONTRACT WORKERS: The U.S. Department of Labor has finalized the Biden administration's worker classification rule, which will go into effect March 11. The rule tightens the definitions around what makes someone an employee versus an independent contractor, revising the 2021 rule, which made it easier for employers to label a worker as a contractor. Given that state data shows 10-20% of employers misclassify at least one employee at their company, this month may mark the perfect time to review these labels. 

"Employers should be careful when they make determinations about who's an independent contractor," says Lina Bond Edwards, partner at commercial litigation firm RumbergerKirk . "If they get it wrong, it can be costly, so employers should take the steps to ensure they're paying employees accordingly." 

Don't make a costly error in classify your employees. Here's what to know: Biden's new worker classification rule is tightening the definition of independent contractors