Still hurting and recovering from the pandemic, people now have to deal with layoffs, record-high ... [+]
October 10 is World Mental Health Day. It's a time dedicated to raising awareness of mental health issues and working toward helping people deal with and overcome challenges. It's not an easy feat. The virus outbreak and its aftereffects exacerbated existing stress, depression, anxiety and burnout. People dealt with the collective trauma of constantly being on edge, dealing with isolation and fear. In 2021, for a brief moment, it looked like things were improving. Sadly, the light at the end of the tunnel was just an approaching train.
Still hurting and recovering from the pandemic, people now have to deal with layoffs, record-high inflation, rising food and housing costs and a plummeting stock market. The financial challenges have taken a toll on people’s mental health and well-being.
CEOs And CFOs Worry About A Recession, Inflation And Soaring Costs
More than 90% of CEOs believe a recession will occur within the next 12 months, according to a recent KPMG survey. The vast majority feel that the recession will be difficult, with only around 34% believing the upcoming recession will be brief and not too painful.
According to a new study conducted by Grant Thornton, a large audit and accounting firm, there is also a decline in optimism amongst chief financial officers. The CFOs are most concerned about the impact of the Federal Reserve Bank hiking interest rates, potentially leading to a recession. The report points to increasing energy costs, supply chain disruptions and higher costs of credit and capital contributing to their concerns and “pessimism.”
Layoffs, Hiring Freezes And A Global Slowdown
There is a steady stream of layoffs and hiring freeze announcements. Tech giants and startups are cutting personnel. Apple pink slipped 100 recruiter contract roles. Meta is slicing staff for the first time in its history and placing a hiring freeze for new employees. The company is also set to close one of its New York offices. More than 600 startups let go of around 86,000 workers, according to Layoffs.fyi, a crowdsourced site that tracks employer riffs. Netflix, Google, Intel, Microsoft, Robinhood, Coinbase and Twitter have all announced hiring freezes or selective downsizes.
FedEx, the ubiquitous package delivery company, surprised Wall Street analysts by changing its forward-looking outlook, warning that profits may falter due to an economic slowdown.
Worries About Your Own Financial Situation
Due to a precarious economy, people are understandably worried about their financial situation, which further impacts their mental health. If you are concerned about paying the mortgage or buying groceries, it worsens feelings of anxiety and stress. It feels like you lack control over your life and circumstances.
Online brokerage firm Robinhood conducted a Financial Wellness Study that found that 84% of Americans are stressed over money. Interestingly, the respondents also said that they continue to spend money on what makes them happy.
The survey indicated that high-income people in the United States have “slightly less” stress compared to middle and low-income Americans. The Millennial and Gen-Z cohorts replied that they are more likely to spend money on things that make them happy compared to Gen-Xers.
Over 80% of respondents said that they are dealing with the effects of inflation by dining out less frequently and using coupons to save money. While the upcoming holidays are a time when people make purchases, nearly 40% of people feel financial stress all year and would seek out financial advice.
Robinhood’s clientele skews toward a younger demographic, but also includes data from Gen-X. Its survey shows that over 40% of Gen-Z and Millennials experience stress when planning for the future.
In particular, they cite elevated anxiety over being able to afford a home or vehicle. Financial stress takes a toll. More than 30% said they have a drink to deal with their anxiety over the ever-increasing costs. To help cope with a more challenging economy, nearly half of Gen-Zs, over 50% of Millennials and 41% of Gen-Xers have created budgets to help counter the stress.
A recent study from LendingClub and PYMNTS found that nearly 60% of American families self-reported that they are just getting by. Surprisingly, 30% of people earning more than $250,000 also live paycheck to paycheck. According to the survey, “More than half of the U.S. population—an estimated 150 million adults—currently live paycheck to paycheck, making it the most common financial lifestyle in the United States.”
Struggling to make ends meet, people rely upon credit cards. Unfortunately, as interest rates rise, so does the cost of carrying an ongoing unpaid balance. There is an omnipresent fear that families are one healthcare issue away from financial ruin.
What Companies Need To Do
Smart managers should increase pay for their staff. In addition to raises, businesses can offer bonuses, stock options and other forms of remuneration.
In a January 2022 survey conducted by Gartner of 71 companies, around 37% of organizations self-reported that they are planning to consider inflation with their compensation budgets. Unfortunately, only 13% intended to raise the compensation for all employees, due to rising inflation. Since that time, inflation has continued to increase rapidly.
A Salary.com survey of employers, conducted February 25 to March 7, shows “most U.S. organizations (73%) are targeting a payroll budget increase of 4% or more this year, and a plurality of organizations (43%) are growing their salary merit-increase budgets by 5% or more." While it's good to see that action is being taken, the single-digit increases may be insufficient.
By now, it should be glaringly obvious to business leaders that inflation is taking a big bite out of their employees’ paychecks. For many people, it feels that they are earning less money, as the dollar is devalued and losing its purchasing power. As the costs of food, clothes, cars, rent and other essentials rise, a person’s paycheck isn’t keeping up.
Team leaders should sit down with their staff and discuss how they can enhance pay to compensate for the rapid rise in inflation. In addition to enhanced payments, the company could offer remote work options.
If a person is allowed to work remotely, they won’t have to commute, reducing costly gasoline consumption. If they take mass transit, there will also be a reprieve on those expenses.
When you are forced to return to the office, you usually buy breakfast, lunch, dinner, or drinks after work. In big cities, this could easily run from $20 to over $30 daily, which is more than $1,000 a year. There is also the need to purchase a new corporate wardrobe after being at home for two years. Working from home, you can buy in bulk and save a lot of money compared to dining out or ordering in, when you’re based in an office setting.
Enhanced Benefits
The most recent U.S. Census Bureau household survey found that over a third of Americans indicated that they are having challenges paying expenses. The number of people reporting that they are experiencing budgeting challenges ranks near the worst time of the pandemic in early 2020.
Seeing this problem, companies need to get creative with their benefit programs. Progressive businesses could help by reducing costs associated with healthcare benefits, offering student loan assistance, providing subsidies for child and elder care and taking advantage of the plummeting stock market by offering higher contributions to retirement plans that could grow tax-deferred and potentially lead to substantial gains years later. Management should also explore offering policies specifically tailored toward the individual needs of workers.
What Other Ways Companies Can Help
Empathetic companies have intuitively noticed this shift in mindset. These organizations established new policies and programs to uplift and empower their team. They pay close attention to their staff’s mental health, emotional well-being and happiness.
Companies need to demonstrate empathy, ensure that their people feel appreciated and valued, offer psychological safety and check in regularly to see how staff are doing and how the company can help. Frequent microsurveys may help understand people's moods and gauge whether it’s better or worsening.
One way to make employees and their families happier is by offering a flexible work style. People could decide for themselves if they desire an in-office, remote, hybrid or another style of working based on what is best for the individual and their family.
What You Can Do
If you feel like you are sliding down a slippery slope of negativity, sadness, stress and feelings of hopelessness, seek out professional help. Actively work on how you can better process and react to events, as well as how you can work through negative thoughts.
Focus on what you want to achieve in your life and career. Design a game plan and put systems into place to achieve your goals. Replace bad thoughts with positive ones. The more time you allocate toward constructive ruminations centered around self-improvement, the less time you’ll spend thinking about matters that just wear you down.
Hyperfocus on what you need to do to improve, grow and develop, so you can succeed. Learn to say “no.” When something does not fit into your overarching life plan and long-term goals, dare to turn it down politely.
Everyone is subjected to constant pressures that can break you. You don’t have to go it alone. Seek out help, if you need it.
