The majority of U.S. employees believe they will be worse off than their parents in retirement, according to new research by Willis Towers Watson.

The 2015 Global Benefits Attitudes Survey asked employees what their biggest concerns were when it came to their overall financial health. Their responses painted a bleak picture, including less generous Social Security and less robust government-provided health benefits.

“We have seen improvements in terms of individuals’ overall financial satisfaction since the crisis in 2007, when we ramped up our survey efforts,” says Steve Nyce, senior economist at Willis Towers Watson. “There is still a lot of concern out there about the long term.”

[Image credit: Fotolia]
[Image credit: Fotolia]

Part of the American dream has always been to do better than the generation that came before you, Nyce says. But that doesn’t even seem possible for younger generations, like the millennials, who are swamped with student loan debt.

Even with higher salaries and good careers, many millennials have a lot of debt concerns. It has become even more difficult to pay off student loans, buy a house or start a family and the situation is much worse at the lower income levels, Nyce says.

Those at the lower end of the pay spectrum find it “really difficult to put money away when all of the other expenses [such as healthcare costs and college tuition] are going on around us,” he says. Moreover, many individuals are struggling against a complex set of problems, not just financial issues, he says. It could be a medical issue or a family member’s illness. Workers struggling with multiple problems, including financial pressures, tend to be much more stressed out, he says, and they bring that to work with them each day.

Willis Towers Watson’s research found that “financial worries, which are strongly linked to stress, ultimately have an impact on people’s ability to perform their best work.”

Twenty-eight percent of those surveyed who struggle with their finances admitted that it prevents them doing their best at work. It also can cause higher absenteeism. Workers who are stressed about finances are absent on average 3.5 days per year, compared to 1.9 days for those who are not stressed about their finances, the survey found.

People who struggle financially also report being highly distracted on the job for 12.4 days per year, compared to 8.6 days for those not worried about their finances.

Willis Towers Watson believes that society needs to move away from just a workplace wellness approach to a workplace well-being approach. The difference is that employers help employees grapple with medical, financial, social and emotional pressures at the same time.

“We’re really thinking more broadly about full employee well-being and looking at the head-to-toe issues employees are facing and how we approach employees through that perspective, rather than focusing on the silos [like health and retirement],” Nyce says.

Doing that means companies have to walk a fine line. They don’t want to overstep their bounds.

Nyce pointed out that in the company’s survey, many people expressed concern when their employer took too much of an interest in their personal financial situation.

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“A word of caution to employers: The last thing we want to do is take steps that upset employees. It is counterproductive."

“A word of caution to employers: The last thing we want to do is take steps that upset employees. It is counterproductive. We must approach employees when we feel we have built brand permission,” he says.

Companies must allow their employees to come to them first with their problems.

“People have so many issues. We all make mistakes in our finances. … The last thing we want to do is scold employees or shame them when going through and dealing with those issues and figuring out a way to be much more approachable after,” he said. “Ultimately, we want employees to engage and seek advice and I think we are trying to develop a culture where any employer developing a well-being program, it is about building connections in the workplace. That is where they will find success.”

The good news is that more companies, particularly large ones, are dedicating additional resources to find solutions to these types of problems.

“We absolutely are moving in the right direction, away from a carrot and stick approach,” Nyce says. “We are seeing in a big way employers taking a step back from that approach and rethinking their strategy.”

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