The Cost of Financial Stress: What Employers Need to Know in 2025

To say the American workforce has been through a tumultuous 20 years, economically speaking, would be an understatement. The financial crisis of 2008 ushered in economic conditions unseen in the United States for nearly a century, leaving many individuals facing tremendous hardship. This difficult period was followed by a decade of significant economic growth, offering some relief and stability. However, the COVID-19 outbreak abruptly ended this, once again throwing the economy into disarray. Although a brief recovery followed, it proved shorter and less stable than the previous expansion. For many, this relentless seesaw of economic highs and lows has become exhausting and discouraging. 

Now, as we turn the page to the next chapter, new uncertainties loom. With a new administration in place, questions abound about what the future holds for American workers and how forthcoming policies will shape the economic landscape. This moment presents an important opportunity to take stock of the state of financial wellness among the U.S. workforce. Emerging research consistently underscores the strong correlation between employees’ financial strain and critical performance indicators such as productivity, healthcare costs, and overall business success. The data paints a stark picture of a growing crisis in employee financial wellness, making it clear that while awareness has increased, substantial efforts are still required to create lasting solutions that improve financial stability for American workers. 

Let’s explore the latest data. 

 

Where Things Stand in 2025 

Financial stress has reached an alarming level for American workers, creating significant challenges in their daily lives. This financial strain is not only affecting their ability to meet basic expenses but also limiting their capacity to save for the future and manage escalating debt.  

A recent Resume Now survey underscores the severity of financial hardship among workers, revealing that 73% of employees can barely afford expenses beyond basic living costs, while 12% are unable to cover even their essential needs. This growing financial strain has forced 30% of workers into debt just to manage daily necessities, exacerbating their overall instability and limiting their ability to plan for the future. 

The savings crisis is equally concerning. Bankrate’s 2025 Emergency Savings Report reveals that 59% of Americans lack sufficient savings to cover a $1,000 emergency expense, and 73% are saving less than they did in 2024. As a result, 43% of Americans would need to borrow money to handle an unexpected financial setback, a troubling reality given the record $1.14 trillion in credit card debt reported by the Federal Reserve Bank of New York. 

Debt in general remains a growing burden. The average total consumer household debt climbed to $104,215 in 2023—an 11% increase since 2020. A staggering 77% of U.S. workers identify personal credit card debt as a significant financial challenge, with 40% admitting it influences their career decisions. Additionally, 62% of private-sector employees factor in student loan debt when assessing job opportunities, which is likely to limit prospects over the course of their career. 

Younger generations, particularly Millennials and Gen Z, are the most vulnerable. 80% of Gen Z workers worry about affording immediate expenses if they were to lose their income, compared to 72% of Millennials and Gen Xers. Retirement savings are also lagging—only 20% of Gen Zers are actively saving for retirement, largely due to a lack of financial literacy. Even among those who do save, contributions are alarmingly low, with 60% of Gen Z and Millennials holding less than $5,000 in retirement savings.  

These financial struggles highlight the urgent need for greater financial education and workplace support programs, but just as important as understanding the state of financial wellness among the American workforce is understanding how things got to this point.  

 

What’s Driving This Financial Distress? 

The roots of poor financial wellness are multifaceted and long-standing, shaped by economic trends, policy decisions, and shifting workforce dynamics. Over the years, stagnant wages, rising living costs, and a lack of comprehensive financial education have compounded the problem, leaving many workers struggling to achieve financial stability. The aforementioned Resume Now study identified several key factors contributing to financial stress, as reported by U.S. workers. These include: 

• Rising housing costs (55%): U.S. home prices have surged by 47.1% since 2020, far outpacing historical trends. Rent prices have also climbed significantly, increasing by 33.1% since the onset of the COVID-19 pandemic. The combination of high mortgage rates and soaring property values has made homeownership increasingly unattainable for many, pushing more individuals into the rental market, where demand has further driven up costs. This housing crisis is particularly challenging for younger workers and low-income families, who are finding it increasingly difficult to build equity or achieve long-term financial stability. 

• Inflation (41%): Although inflation has decreased from its peak in 2022, consumer prices remain 22.5% higher than in February 2020, intensifying financial pressures on workers. Rising costs for essentials like groceries, healthcare, and transportation have further strained household budgets. Many employees find themselves cutting back on discretionary spending, delaying major purchases, or even taking on additional jobs to make ends meet. Despite wage increases in some sectors, the cumulative effect of prolonged inflation continues to erode purchasing power and financial stability for millions of workers. 

• Wages failing to keep up with inflation (34%): While average hourly earnings have grown by 19.2% since 2020, inflation has risen by 20.6% over that same period, resulting in a 1.1% decline in real hourly earnings. This disparity has left many workers struggling to maintain financial stability. Even in industries experiencing wage growth, the purchasing power of these earnings has diminished, making it harder for employees to keep up with rising costs. Many workers are resorting to gig work, side hustles, or additional part-time jobs just to cover basic expenses. As a result, financial stress continues to rise, impacting overall well-being and job performance. 

• Inability to save for emergencies or the future (33%): At the end of September 2024, Americans had collectively saved $291 billion less than projected had the pandemic not occurred. Despite government stimulus efforts, many workers remain financially vulnerable. Rising costs and stagnant wages have made it increasingly difficult for individuals to build a financial safety net, and many workers report having to dip into their savings just to cover daily expenses, leaving them with little to no cushion for unexpected emergencies. Without adequate savings, financial setbacks such as medical bills, car repairs, or sudden job loss can quickly spiral into long-term financial distress. 

 

Employers are Feeling the Pain of Financial Stress 

It isn’t just employees who are feeling the pain. Poor employee financial wellness has far-reaching consequences for both workplace productivity and company profitability. Recent research conducted by Graystone Consulting and Morgan Stanley sheds light on how this struggle is impacting employers’ bottom lines.   

Financial concerns have surpassed work, health, and family issues as the number one source of stress for employees. Notably, even among those earning $100,000 or more annually, 52% still report feeling financially stressed, highlighting that financial worries are not limited to lower-income workers. 

This stress manifests in tangible ways that affect business operations. One in five employees admits that financial concerns hinder their job performance, and nearly half of financially stressed employees spend at least three hours per week handling personal financial issues during work hours. Over the course of a year, this distraction adds up to more than 156 lost work hours—or nearly 20 full workdays—resulting in a hidden cost of approximately $3,922 per employee in lost productivity. 

The ripple effects extend beyond productivity. Employees facing financial strain are nine times more likely to experience workplace conflicts and are twice as likely to be actively seeking new job opportunities. Perhaps most shocking, 40% of workers are planning to postpone retirement due to financial instability, leading to significant business costs in wages, healthcare, and workers’ compensation. Even a one-year delay in retirement can drive workforce costs up by 1.0%–1.5%, with an estimated $50,000 incremental expense per delayed retirement case.  

These financial pressures reinforce the urgent need for employers to take proactive measures in addressing employee financial wellness. 

 

What Employers Are Doing 

With financial stress becoming a growing workplace concern, both employers and employees are aligned in recognizing the need for financial wellness benefits. A PNC Bank survey found that 96% of employers believe these benefits enhance employee satisfaction and retention, and 80% of employees would remain with an employer that provides strong financial wellness support. 

Despite this awareness, implementation has been slow. According to a Transamerica Prescience survey, only 47% of employers are expected to adopt comprehensive financial wellness programs by the end of 2026. However, there remains significant uncertainty about how these programs will be structured and funded. While some experts (34%) predict that employers will absorb the costs, others (17%) expect employees to bear the financial burden, and 24% foresee a cost-sharing approach. Additionally, opinions vary on the format of these programs, with some employers leaning toward automated financial assistance tools, while others prefer a mix of digital and human coaching.  

These uncertainties highlight the fact that, while financial wellness benefits are widely recognized as necessary, there are still more questions than answers when it comes to their implementation. 

 

Meaningful Change Starts with Better Information  

With financial stress becoming a growing workplace concern, both employers and employees are aligned in recognizing the need for financial wellness benefits. A PNC Bank survey found that 96% of employers believe these benefits enhance employee satisfaction and retention, and 80% of employees would remain with an employer that provides strong financial wellness support. 

Understanding where employees need the most help is the first critical step toward improving their financial wellness. Employers must gain a clear picture of the unique financial challenges their workforce faces before implementing support initiatives. By identifying specific areas of need, organizations can tailor their financial wellness programs to have the greatest impact. Here are three actionable steps employers can take to assess these needs effectively: 

1. Conduct Comprehensive Employee Surveys: Develop and distribute anonymous surveys designed to capture detailed insights into employees’ financial well-being. The survey should cover key areas such as budgeting habits, debt levels, savings goals, and financial literacy. Including open-ended questions allows employees to share personal challenges and suggestions for potential support options. Analyzing this data will provide a clear understanding of the most pressing financial issues within the workforce. 
2. Facilitate Focus Groups and One-on-One Interviews: Host focus groups and confidential interviews with employees across different departments and seniority levels. These discussions can reveal deeper insights into financial pain points and the types of resources employees would find most valuable. Be sure to create a comfortable environment that encourages honest feedback. Insights from these sessions can guide the customization of financial wellness programs to ensure they address the actual needs of the workforce. 
3. Leverage Existing HR and Benefits Data: Review existing data from HR systems, such as benefits utilization rates, retirement plan participation, and requests for financial assistance programs. This data can highlight gaps in current offerings and provide clues about where employees may need additional support. For example, low participation in retirement plans could indicate a need for more accessible retirement education or matching programs. By combining this data with insights from surveys and interviews, employers can design targeted, effective financial wellness initiatives. 

 

The state of employee financial wellness in 2025 presents both a challenge and an opportunity, underscoring the pressing need for meaningful action. As organizations increasingly acknowledge the direct link between financial well-being and overall business success, the coming years will be pivotal in not just recognizing these issues but in actively addressing them through comprehensive financial wellness initiatives. 

Supporting Working Parents Through Employee Discount Programs

For the more than 30 million working parents in the U.S., the past five years have been marked by rapid change and adaptation. The COVID-19 outbreak in 2020 dramatically reshaped daily life, forcing a convergence of professional and parental responsibilities within the home. Although this shift presented formidable challenges—balancing Zoom meetings with homeschooling and managing work deadlines amidst family demands—it also offered unexpected benefits. Working parents gained more quality time with their children, and the flexibility of remote work allowed for more adaptable childcare arrangements. For parents of the millions of babies born between 2020 and 2024, this blended dynamic of work and family life is all they’ve ever known.  

However, as more companies begin implementing return-to-office plans, this new normal may be coming to an end and many working parents are discovering that the level of support they’ve grown accustomed to is no longer guaranteed. While HR leaders continue to champion enhanced childcare benefits, their efforts are hitting a roadblock at the executive level. According to a recent KinderCare survey, nearly 80% of Fortune 500 CHROs report difficulties convincing the C-Suite to expand employer-sponsored childcare offerings, with the primary obstacle being concerns about return on investment (ROI).  

But the data tells a different story.  

 

The ROI of Childcare Benefits 

Despite hesitation from the C-Suite, HR leaders strongly advocate for the expansion of childcare benefits, recognizing their critical role in workforce stability and engagement. Findings from the same KinderCare survey highlight just how valuable these benefits can be: 

• 86% believe that offering childcare benefits is instrumental in attracting top talent. 
• 85% report that these benefits play a critical role in reducing employee turnover. 
• Nearly two-thirds identify them as a key component of their talent acquisition strategies. 

Beyond expert opinions, quantifiable data reinforces the value of these benefits. An analysis conducted by Moms First and the Boston Consulting Group revealed that childcare benefits can yield an impressive ROI of up to 425%. Drawing on HR data, employee interviews, and surveys from five participating companies, the study demonstrated measurable gains in employee retention, enhanced productivity, and decreased absenteeism. Additionally, these benefits contribute to higher morale among working parents, fostering greater employee engagement and long-term loyalty.  

However, even with clear evidence showing the substantial ROI of childcare benefits, HR leaders still face other challenges in their efforts to support working parents. 

 

Other Barriers to Expanding Childcare Benefits 

While concerns about ROI remain a significant hurdle, HR teams also face the ongoing challenge of managing limited benefits budgets. With a finite pool of resources, they must make tough decisions about which programs to prioritize, often having to weigh childcare benefits against other pressing employee needs – particularly healthcare.  

According to a recent Mercer survey, despite escalating healthcare costs, most employers are committed to maintaining or selectively enhancing health benefits in 2025, with a particular focus on areas such as reproductive health and GLP-1 medications. While these investments are essential for employee well-being, the rising costs associated with healthcare often divert resources away from other critical benefits, including childcare support. 

However, benefits teams are not without viable alternatives, and employers can still make a meaningful impact in supporting working parents through creative and cost-effective strategies. 

 

Leveraging Employee Discount Programs to Support Working Parents 

For companies unable to expand formal childcare benefits, employee discount programs offer a practical and flexible solution to ease the financial burdens faced by working parents. The U.S. Department of Labor’s National Database of Childcare Prices reports that families spend between 9% and 16% of their median income on full-day care for one child. This can often equate to costs comparable to or exceeding monthly rent. The high costs are a major burden for working parents, particularly those in lower-income brackets, where childcare expenses can consume an even larger portion of their earnings.  

Employee discount programs frequently partner with local and national childcare providers, offering significant savings on daycare, after-school programs, tutoring, and babysitting services. These discounts can translate into thousands of dollars in annual savings, making a tangible difference in financial stability for many families. Additionally, the flexibility of these programs allows parents to choose options that best align with their schedules and caregiving preferences, ensuring a personalized approach to childcare support that wouldn’t be possible with one universal offering. 

Of course, the financial demands of raising a child extend far beyond daycare and babysitting costs. Parents are faced with a constant stream of expenses that can quickly add up, and employee discount programs can provide much-needed relief by helping working parents manage these ongoing costs more effectively. Let’s look at a few examples: 

• Diapers: The annual cost of disposable diapers for one child averages around $840. This recurring expense can quickly add up, especially for families with multiple young children. Employee discount programs can offer partnerships with major diaper brands and retailers, providing bulk purchase discounts or coupons that ease this financial burden over time. 
• Formula: With an average yearly cost of $1,700, formula represents another significant financial commitment. For families with infants who rely exclusively on formula, these costs can be even higher. Discount programs often include savings on both regular and specialized formula types, helping families manage the cost while ensuring their babies receive the nutrition they need. 
• Toys: Families spend approximately $580 per year on toys, totaling close to $6,000 by a child’s tenth birthday. Beyond just entertainment, toys contribute to a child’s cognitive and social development. Discount programs can help manage these costs effectively by offering deals on educational toys, seasonal items, and even subscription services that deliver age-appropriate toys regularly. 
• Essential Gear: High-cost items like car seats and strollers, which can exceed $500, are non-negotiable for safety and mobility. These items also need to meet strict safety standards, often making the most reliable products the most expensive. Employee discount programs can provide exclusive deals on trusted brands, bundle offers, or seasonal sales, offering significant savings without compromising on quality and safety. 

 

Maximizing the Impact of Discount Programs 

To fully leverage the benefits of employee discount programs, employers should take a strategic approach that goes beyond simple implementation. This involves actively promoting the program, regularly evaluating its effectiveness, and ensuring it aligns with the evolving needs of working parents. A well-managed discount program can significantly enhance employee satisfaction, reduce financial stress, and contribute to a more supportive workplace culture. Let’s go over a few tips: 

1. Promote Awareness: Proactively raise awareness among working parents about the availability and advantages of the discount program. Often overlooked in benefits communications, these programs can be underutilized simply because employees aren’t aware of them. Use targeted communication channels, regular reminders, and onboarding materials to keep the program top of mind. 
2. Gather Feedback: Actively seek feedback from employees to pinpoint the areas where support is most needed. Conducting regular surveys or focus groups not only helps tailor the discount program to better meet parents’ needs but also generates valuable insights that can strengthen the case for broader childcare benefits. 
3. Measure and Communicate Impact: Consistently track and analyze the program’s effectiveness through key performance indicators such as reduced absenteeism, lower healthcare costs, improved productivity, and higher employee retention rates. Presenting this data clearly and effectively can help build a compelling business case for the C-Suite, highlighting the tangible ROI of supporting working parents. 

By creatively utilizing employee discount programs, companies can provide meaningful support to working parents, fostering a more engaged, productive, and loyal workforce. 

Empower Your Employee Caregivers with Discount Programs

Employee leave requests rose in 2024 for the third consecutive year, according to a recent report by AbsenceSoft. While injury and illness recovery (57%) and managing mental health challenges (47%) topped the list of reasons, caring for an aging parent (37%) emerged as the third most common driver. This trend underscores the growing pressures on employees balancing work with caregiving responsibilities. 

More than 48 million Americans currently serve as unpaid family caregivers, a number that is poised to grow as the Baby Boomer generation continues to age. With approximately 10,000 Baby Boomers turning 65 each day, the demand for caregiving is set to reach unprecedented levels over the coming years. 

Employees who are also caregivers face a unique set of challenges that significantly impact their physical, mental, and financial well-being. Studies show that caregivers experience higher rates of physical and mental illness compared to non-caregivers, yet they often place their own health needs on the back burner. Financially, the situation is just as demanding. U.S. caregivers contribute an estimated $600 billion in unpaid labor annually, while also shouldering substantial out-of-pocket costs to ensure their loved ones receive necessary care. 

As caregiving responsibilities continue to rise, employees are increasingly looking to their employers for meaningful support and resources to help them manage these competing demands. 

 

The Growing Impact of Caregiving on Employers

Employers are increasingly feeling the impact of caregiving demands, and the effects extend well beyond accommodation requests. The growing trend of employees juggling work and caregiving responsibilities presents significant challenges to workforce stability and productivity. According to a recent report from AARP and S&P Global: 

• 67% of family caregivers have difficulty balancing their jobs with caregiving duties. 

• 27% of working caregivers have shifted from full-time to part-time work or reduced their hours, and 16% have turned down promotions. 

• 16% have stopped working entirely for a period of time, and 13% have changed employers to meet caregiving responsibilities. 

Clearly, as the population continues to age, employers will have to implement policies and benefits designed to retain this critical segment of employees in the workforce. But that’s easier said than done. 

 

Barriers to Offering Caregiver Benefits

Despite the growing need, many employers face significant challenges in implementing caregiver benefits. Rising healthcare costs, ingrained workplace norms, and the lack of regulatory mandates create obstacles that make it difficult to introduce new support programs. While employers recognize the importance of offering these benefits, balancing financial constraints and cultural shifts within the workplace can be a complex task. Here are some of the primary challenges they must navigate: 

• Cost: Subsidized eldercare, paid caregiver leave, or access to caregiving resources can be expensive to implement and maintain. For smaller companies or those with tighter budgets, these costs may seem prohibitive compared to more traditional benefits. A report by Mercer highlighted that the cost of employer-provided healthcare has grown by an average of 6.5% annually, leaving many organizations struggling to balance budgets while also considering the addition of new benefits like caregiving support. This financial strain and focus on cost containment underscores the difficulty employers face in expanding their benefits offerings. 
• Cultural Stigmas: Some workplaces still harbor cultural stigmas around discussing caregiving responsibilities. Employees may worry about being perceived as less committed or capable if they admit to caregiving challenges, reducing demand for benefits and deterring employers from offering them. According to the Harvard Business Review, nearly 60% of employees feel uncomfortable discussing caregiving responsibilities with their employers, highlighting the critical need for cultural shifts that normalize these conversations.
• Lack of Regulation or Mandates: In the U.S., there is no federal mandate requiring comprehensive caregiver support. Without a regulatory push, many organizations deprioritize these benefits in favor of compliance-focused initiatives. Comparatively, countries like Germany and Japan have implemented national policies to support caregiving, illustrating a gap that leaves U.S. employers to navigate this complex issue largely on their own. 

 

Leveraging Employee Discount Programs to Support Caregivers

For companies unable to provide dedicated caregiving benefits, an employee discount program can serve as a meaningful and cost-effective way to assist employees. While they can’t replace a purposeful employee caregiving strategy, these programs can offer immediate assistance that addresses many of the unique challenges caregivers face. Here’s how these programs can help: 

Elder Care  

The median cost of an in-home health aide in the U.S. is $5,148 per month—a significant financial burden for many employees. Discount programs can provide access to reduced costs for elder care services such as home health aides, senior transportation, or respite care. These savings can help employees manage the high cost of providing quality care for aging loved ones without sacrificing their own financial stability. According to Genworth’s 2023 Cost of Care Survey, long-term care costs have increased by 4-5% annually, underscoring the importance of financial relief for employees. 

Child Care  

More than 37% of caregivers also care for children or grandchildren under the age of 18, making them part of the “sandwich generation.” Juggling the needs of children alongside caregiving responsibilities for older relatives can be overwhelming. Discounts on childcare services, including daycare, after-school programs, and summer camps, can help ease both the financial and logistical challenges these employees face, giving them valuable time to focus on other responsibilities. 

Medical Supplies and Equipment 

Not all medical supplies and equipment—such as walkers, wheelchairs, specialty beds, or adaptive devices—are covered by insurance. These uncovered items can cost caregivers thousands of dollars annually, and The National Alliance for Caregiving notes that 45% of caregivers use their personal savings to cover these costs. Discount programs that offer reduced prices for essential medical equipment or partnerships with suppliers can make a significant difference, helping employees ensure their loved ones have what they need without creating unmanageable financial stress.  

Financial Planning Tools 

Roughly 90% of physical caregivers are also financial caregivers, responsible for managing their loved ones’ expenses and navigating complex financial decisions. Given the high costs associated with caregiving, access to financial planning tools, workshops, or consultations through a discount program can empower employees to better manage their budgets, reduce financial strain, and prepare for future expenses more effectively. Studies indicate that caregivers who receive financial guidance are 27% more likely to feel confident about their ability to manage caregiving costs. 

Health and Wellness Resources 

The physical toll of caregiving is significant, with three-fifths of caregivers reporting fair or poor health, chronic conditions, or disabilities. Encouraging caregivers to prioritize their health is crucial. Discounts on gym memberships, fitness equipment, or wellness retreats can motivate employees to stay active and focus on self-care. Additionally, partnerships with wellness coaches or nutritionists can provide caregivers with personalized guidance to maintain their physical well-being. A recent study by the Caregiver Action Network revealed that caregivers who engage in regular physical activity report a 40% improvement in overall mental health. 

Mental Health Resources 

Caregiving often leads to “caregiver burnout,” a state of physical, emotional, and mental exhaustion caused by the constant demands of managing another person’s well-being. This burnout can negatively impact not only the caregiver’s mental health but also their overall productivity at work and quality of life. Offering discounts on counseling services, mental health apps, or wellness programs can be a lifeline, helping caregivers build resilience, cope with stress, and regain balance in their lives. Providing access to virtual therapy or support groups can also make it easier for caregivers to seek help within their busy schedules. 

Everyday Essentials 

According to a study by the TIAA Institute and the University of Pennsylvania School of Nursing, the average caregiver’s uncompensated expenses total more than $7,000 annually. These costs often include groceries, household goods, and other essentials. Discount programs that offer savings on these everyday items can alleviate some of the financial strain, allowing caregivers to redirect their limited resources toward other critical needs. 

 

Educating Employees About Discount Programs

To truly maximize the impact of an employee discount program, employers must take intentional and proactive measures to ensure their workforce is both aware of these benefits and confident in how to use them. It’s not enough to simply offer a discount program—it requires consistent communication, clear guidance, and active promotion to highlight its value and accessibility. By fostering awareness and engagement, employers can transform their discount program into a powerful tool that directly supports caregiving employees. Here are a few actionable strategies: 

1. Assist Employees Requesting Accommodations. When employees request accommodation for caregiving reasons, make sure they’re informed about how the discount program can help them. Personalized guidance during these discussions can make a significant difference. 
2. Connect with Employee Resource Groups. Proactively engage with relevant employee resource groups to share information about the benefits of the discount program and how it supports caregivers. These groups can also serve as a valuable channel for gathering feedback to improve the program. 
3. Incorporate Caregiving Benefits into Communications. Given the expected increase in caregiving responsibilities over the coming years, include information about how the discount program can assist caregivers in your standard benefits communications plan. Use newsletters, intranet updates, and dedicated webinars to ensure employees are aware of these valuable resources. 

By leveraging employee discount programs and raising awareness about their benefits, employers can better support employees who are also caregivers, enhancing both retention and employee well-being in the process.