— Americans are worried about the economy and have limited savings to weather a recession, layoff, or other financial emergency
— Despite the bleak economic outlook, most workers don’t believe their employers will lay off employees
— Few workers consider quitting their jobs, although hybrid workers are more likely to quit than those working 100% remote or in-person
SAN MATEO, Calif., December 16, 2022 /PRNewswire/ — With few Americans financially prepared to withstand a layoff or other emergency, most workers plan to fall back on their current jobs – a sign that the Great Quit phenomenon that has begun during the pandemic could end in 2023, according to a new study by Reachthe leader in digital personal finance.
The Verification of financial adequacy 2023 is the latest survey from the Achieve Center for Consumer Insights and reveals considerable concern about the economy, jobs and personal financial security. Despite austere attitudes toward macro conditions, 74% of respondents said they did not believe their employer intended to lay off workers in the next year.
“Many Americans think the economy is in bad shape, but turn a blind eye to the potential impacts,” said the co-founder and co-CEO of Achieve. André Housser. “This can prevent consumers from taking the necessary steps to prepare their finances in the event that they experience a loss or reduction in employment or income. It’s not too late to take steps to shore up their finances and prepare for the unexpected, but the time has come.”
Meanwhile, after nearly two years of marked increases in the number of workers quitting en masse to seek new jobs – a trend dubbed the Great Quit – 73% of workers polled in Achieve’s survey say they have no intend to leave their current job.
“Workers who are worried about the economy feel it is safer to stay in their current job,” Housser said. “This is especially true among baby boomer generation workers who are increasingly approaching retirement age and prefer the stability of their existing jobs.”
The work environment affects the decision to accept buyouts
In response to a hypothetical scenario of an employer offering buyouts as an alternative to layoffs, about 42% said they would turn down the offer altogether. More than 4 in 10 (43%) said they would only accept a buyout that included six months or more of severance pay.
Employees who work in a hybrid environment were more likely to want to voluntarily leave their job than those who work full-time, remotely or in person. If offered a severance package to quit, 71% of those working in a hybrid environment said they would accept it. Only 53% of those working entirely remotely said they would, and 56% of those working entirely in person.
The study also found that 42% of consumers say they are not financially prepared if they are made redundant. Almost a third (32%) said they expected to receive a severance package of one month or less; 21% did not know if they would receive anything if they were laid off.
Negative Outlook on US Economy, Positive Outlook on Personal Finances
Despite displaying a positive outlook on their household finances, the majority of Americans are unprepared for a potential recession and the accompanying disruptions in the job market.
“After a year marked by record inflation and turmoil in financial markets, consumers are struggling to navigate economic uncertainty,” said Housser. “From the continued rise in interest rates to the continued strains of rising costs, supply chain shortcomings and the end of pandemic stimulus and forbearance programs, consumers should take action to prepare for what could continue to be a tumultuous 2023.”
Reach Verification of financial adequacy 2023 report notes a clear gap between consumers’ outlook on the national economy and their own finances. Nearly three-quarters (73%) of Americans said they felt poor or very poor about economic conditions in the United States, with nearly a third of Gen Xers and Baby Boomers saying that they felt that the current economic conditions were very bad.
Less than 6% of Gen Z and Millennials believe economic conditions are very good, three times higher than baby boomers. Negative sentiment was consistent across all types of employees, and among landlords and tenants.
In contrast, consumers were generally positive about their household finances, with 52% saying they felt good or very good about their current financial security. “This optimism, however, may not have a solid foundation,” said Housser. “There are signs that Americans need to lean into planning and preparation, regardless of how safe they feel.”
Living paycheck to paycheck, with precarious emergency savings
A startling 66% of respondents said they live paycheck to paycheck. Just over half of respondents (51%) have less than $1,000 in an emergency savings fund, including 28% who say they have no emergency savings.
- 25% of baby boomers have no emergency savings.
- 33% of Gen Zers have no emergency savings.
- 40% of hourly workers had less than $500 in emergency savings, compared to only 20% of employees.
When asked how they would cover an unexpected expense or disruption to their job and income, respondents said they would reduce their expenses. For example, 61% said they would reduce dining out; 49% on entertainment; and 42% on vacation. However, those that would cut essential spending, including debt repayment, were of concern.
- Grocery: 31%
- Savings: 25%
- Credit card payments: 14%
- Health: 9%
- Retirement: 8%
Data and study findings are based on an online survey of 1,000 US consumers ages 18-65, including a statistically significant sample of Gen Z adults. Data is representative of benchmarks in the Census Bureau of US Population for Age, Sex, Race and Ethnicity.
About the Achieve Consumer Information Center
The Achieve Center for Consumer Insights is an ongoing initiative that leverages Achieve’s team of digital personal finance experts to provide a view into the state of consumer finances. In addition to sharing insights drawn from Achieve’s proprietary data and analysis, Achieve’s Consumer Insights Hub publishes in-depth research, tailored data and thoughtful commentary in support of Achieve’s mission. Achieve to help everyday people borrow and stay on the path to a better financial future.
About Reach
Reach is the leader in digital personal finance. Our solutions help everyday people engage and stay on the path to a better financial future, through innovative technology and personalized coaching. Leveraging proprietary data and analytics, our solutions are tailored to every stage of a consumer’s financial journey and include personal loans, home loans, debt relief, and financial tools and education. . Achieve is headquartered in San Mateo, California and has nearly 3,000 dedicated employees across the country with centers in California, Arizona, Texas and Florida and has consistently been recognized as a better place to work.
Achieve and its affiliates are subsidiaries of Freedom Financial Network Funding, LLC, including Bills.com, LLC d/b/a Achieve.com (NMLS ID #138464) Equal Housing Lender; Freedom Financial Asset Management, LLC d/b/a Achieve Personal Loans (NMLS ID #227977); Freedom Resolution (NMLS ID #1248929); and Lendage, LLC d/b/a Achieve Loans (NMLS ID #1810501), Equal Housing Lender.
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