‘Doom Spending’: Do employers need to do more?

We all enjoy a bit of retail therapy from time to time.

But, while retail therapy is fine in moderation, a more alarming trend seems to be emerging amongst younger workers: “Doom Spending”.

Doom Spending describes an anxiety-fuelled purchasing trend whereby a person has become so stressed about their finances that they are spending money to alleviate that stress – thereby feeding a vicious cycle.

A recent survey discovered that 43% of Millennials and 35% of Gen Zers use Doom Spending to make themselves feel better, in spite of the fact that this bad habit will ultimately worsen their financial worries.

However, despite the counter-productiveness of Doom Spending, it does raise red flags for employers and HR professionals about how financial stress is a persistent issue. Seven in ten (68%) HR professionals noticed a rise in requests for financial support or education in the past year, and in a different study by PwC, 57% of employees cited finances as the top cause for stress in their lives.

Whilst Doom Spending is definitely not making this problem any better, it does signify a call to action for employers: the need for financial wellbeing support.

Managing money can be hard, especially for those younger workers who have less experience in doing so. Pair this with the rise of flexible credit financial services which allow people to spread the cost of purchases over a few months, and it’s no wonder that managing finances has become more difficult.

We now live in a world where the average person can have anything they want, when they want it – at a price. But it can be hard to resist the temptation when things that were once very expensive have now become accessible through monthly payments. There is also the element of tailored advertisements on social media, using subliminal messaging techniques that are constantly piquing our interest and reminding us that we want – and can have – MORE.

That’s why having financial wellbeing support available to workers can be such an effective workplace benefit. Not only will it help employees feel more confident in managing their finances and correcting their spending habits, it also helps to reduce employee stress, which in turn leads to better productivity and engagement.

In addition to this, those companies offering financial wellbeing tools (such as access to Wagestream) are going to be more attractive to those looking for work. The above research from PwC confirms this, as it also discovered that 73% of financially stressed employees said they would be attracted to another employer who cares more about their financial wellbeing.

So, if you would like to discuss how we can help design and implement financial wellbeing strategies for your organization to increase your talent attraction and reduce financial stress, please get in touch with us today.