The holiday season is a time to take a break. But it’s often overlooked that personal commitments, travel plans, and extra pressure to wrap up the year strong at work, leave employees feeling overwhelmed. This year in particular, as the holiday stress sets in, holiday spending will be top-of-mind as employees navigate a new normal.
Finances Are A Concern
Financial stress is worrisome any year, but even more in 2020. Did you know that prior to the pandemic, 69% of Americans had reported that having insufficient funds for the holiday season was their biggest cause of stress?
Employees are overwhelmed. Last month, Goldman Sachs conducted a survey surrounding holiday spending that discovered:
- 1/2 of Americans feel that holiday gift-buying is the most financially stressful event throughout the year
- In addition, more than 1/4 of Americans think that they will spend less on holiday gifts this year compared to last year
- Of those surveyed who think they’ll spend less on holiday gifts this year, 1/2 claimed the reason was due to Covid-19 restricting their funds
Back in November of 2019, Goldman Sachs conducted a similar survey which found:
- 62% of Americans are likely to choose to receive no gifts this holiday season, in exchange for avoiding the financial expense and hassle of buying gifts for others this year
- Almost 2/3 of Americans stated they will end up spending more money than they’d like during this holiday season
These are just a few examples of the many ways employees’ stress levels are affected during the holiday season. Though finances will be a major cause of this year’s holiday stress…
What Factors Specifically Will Affect Holiday Spending?
There are 3 main factors that play a major role in how money is spent during the holidays:
Consumer Debt
In 2020, consumer credit scores have declined and families have been forced to deal with unexpected expenses, such as childcare costs, reduced pay or higher utility bills amidst the pandemic. This process has been further allowed by rules put in place during the pandemic that lift certain restrictions. However, these payments will eventually be due and many of your employees may be racking up debt without fully realizing it.
Stagnant Wages
In June, half of Americans claimed that they or someone in their household had lost employment income over the last three months. Additionally, the Census Bureau found that 48% of those who are 18 and older have claimed to have lost income since March. This amount adds up to a stunning 119 million Americans!
Consumer Confidence
Economic analysts use the Consumer Confidence Index to measure consumer confidence throughout the year. This index is meant to be an indicator of how the average American feels about the economy and predicts the likelihood of the amount consumers will spend. When people have greater confidence that they will acquire a lucrative job, they are more likely to spend money.
Considering the fact that an estimated 31 million people are either not working or working less than they would like, it’s safe to say that consumer confidence is extremely vulnerable.
Have You Considered Offering an Employee Loan Program This Holiday Season?
One of the most effective solutions to mitigate employees’ financial stress during the holidays is to offer them financial support in the form of small-dollar loans. Employees can have the freedom to choose how and where they would like to spend their money.
People’s financial obligations can come in a variety of forms. Travel expenses, personal gifts, or other unexpected financial emergencies can arise at any time. Sadly, when employees need access to funds, especially during the holiday season, they turn to predatory lenders in order to relieve their financial stress. In fact, as many as 12 million Americans take a payday loan every year.
However, employers can help. TrueConnect offers employees safe and affordable loans that they otherwise may not be approved for, because there is no credit check required to be approved. Better yet, it costs the employer nothing to offer to their employees.
Receiving a loan is simple:
- Employees fill out an online application that guides them every step of the way
- Approval within 5 minutes
- Funds are transferred as soon as the next business day
- Repayments are automatic through small payroll deductions
Remove Holiday Spending Stress
The holiday season is an extremely stressful time, especially if an employee is dealing with financial hardships at home. Not only does this stress negatively impact an employee’s mental or physical health, but it impedes their ability to be productive at work.
To learn more about how you can help alleviate your employees’ financial burdens this holiday season, contact us today.
