Workforce

Stress about finances takes toll on limited-service workers

And offering a retirement savings plan can significantly reduce turnover, according to other data.
Stressed worker
Limited-service workers said financial stress is having a negative impact on their emotional, mental and physical health. |Photo: Shutterstock.

About two-thirds (66%) of quick-service and fast-casual restaurant workers are at least somewhat stressed about their finances, according to an independent study by YouGov that was commissioned by tech company DailyPay.

Meanwhile, helping workers plan for retirement could significantly boost retention, according to separate research from the payroll and benefits company Gusto.

The YouGov survey, which included 688 limited-service workers including cashiers, cooks, kitchen staff, counter servers, delivery and drive-thru attendants in September and October, found that the majority said that stress was having a negative impact on their emotional well-being (72%), their mental health (70%) and their physical health (64%).

Another 58% said financial stress impacted their job satisfaction, as well as job performance (39%) and attendance (34%).

One of the stressors was having cash on hand—a question likely asked because DailyPay offers on-demand pay solutions.

According to the YouGov survey, 72% of respondents are at least occasionally short on cash, while 35% said they were frequently or very frequently short on cash. Another 56% said getting paid more frequently at work than they currently do would be very or extremely beneficial.

The good news is that 45% of respondents said they feel better financially compared to a year ago. And only 14% expected their financial situation to get worse within the next 12 months.

The Gusto report offered data indicating that workers are 40% less likely to leave their employer in their first year when offered retirement benefits.

But in the food-and-beverage industry—one of the least likely to offer retirement plans as a benefit—workers were 54% less likely to leave their employer in the first year if they had access to employer-sponsored retirement plans.

The labor crunch in recent years has forced restaurant companies to increase wages and benefits to compete for workers, including offering healthcare coverage, paid vacation, family leave and other perks, including contributions to 401K and other retirement savings plans.

Gusto, which describes itself as an “all-in-one people platform” serving small- and medium-sized businesses, argues that the benefit that gives employers “most bang for their buck” is offering an employer-sponsored 401K. The resulting benefit of lower turnover more than pays for the cost of the plan, Gusto contends.

For example, Gusto estimates that a 401K plan can result in cost savings of more than $100,000 in reduced employee turnover costs alone, which is about a 2X return on the initial costs of offering the retirement plan.

And for some employers, retirement benefits may soon be required.

Fourteen states have enacted legislation pushing private businesses to offer some form of retirement savings, typically a traditional or Roth IRA. Regulations vary, but some states may impose penalties for failing to make retirement benefits available, according to the Gusto report.

Gusto said 22% of the 200,000 or so businesses on its platform offer some form of retirement benefits, though it varies by size. Businesses with fewer than 10 workers tend to make retirement plans available to about 15% of employees.

Meanwhile, about 65% of businesses with 100 or more employees offered retirement savings options, Gusto said.

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