One of the least discussed workplace stresses during the economic downturn of the last four years has been the financial fallout on workers everywhere.
Once jobs started being lopped from payrolls throughout the country, people became fixated on the unemployment rate. As unemployment rose, job security became the overriding issue of the day.
Now as the jobless rate has begun a modest improvement, there is another issue of collateral damage that people rarely discussed. That is the financial implications job loss and a stagnant economy have created.
A new study shows that 72 percent of human resources professionals think employees have been more likely to dip into their retirement savings over the past year because of job issues, while 83 percent say they have detected some degree of impact on work performance because of personal financial challenges of workers over the past year.
“The source of money woes is unsurprising but the toll it’s taking on both workers and their employers, in addition to the persistence of the weak economy, are all troubling issues,” says Mark J. Schmit, vice president of research at SHRM.
His organization polled 458 human resource professionals and found that 47 percent found that concern over financial issues caused employees to struggle with their ability to focus on work. Forty six percent said those issues contributed to overall employee stress, 26 percent observed a negative impact on employee productivity, and 24 percent said financial concerns contributed to employee absenteeism and tardiness.
This is how the stumbling economy is affecting jobs. Just think how it is affecting those suffering with long-term unemployment or those who were forced into premature retirement with inadequate savings.
The U.S. Department of Labor says that there is considerable evidence that many people dropped out of the work force over the past couple of years because they had no hope of finding work in a bad economy. Although no one has a handle on how many workers that might be, you can be assured that many of them have dipped into retirement savings to tide themselves over until the economy recovers.
Many of those were older workers, age 50 or more. Their chances of holding jobs with the same level of pay and benefits that they once received are clearly diminished.
The Employee Benefits Research Institute in Washington, D.C., says that while only 11.2 percent of workers planned in 2006 to work until the age of 70, 14.8 percent indicated that in 2010. And, while 1.7 percent figured in 2006 they would continue working until 80, now three times that many workers expect to be working until 80. Some workers don’t even expect to ever retire.
Stagnant or reduced wages and long-term unemployment can be especially damaging to older workers because they are much less likely to find jobs today that match up to their previous jobs. At the same time, those workers who do find work have far less time in their careers to recoup their losses.
And, if they have had to dip into retirement savings, it means they likely will be working much longer than previously anticipated just to make ends meet. It’s not all about the unemployment rate when jobs are lost. But there is collateral damage when people lose their jobs near retirement age. We can’t forget those issues either.