"As AI promises to revolutionize business models, employers are upbeat about the future, but they may be overlooking their most valuable asset — their employees," said Catherine Collinson, CEO and president of Transamerica Institute and Transamerica Center for Retirement Studies. "It takes people to implement and operationalize new technologies and, right now, workers are stressed and strained in today's economy."
For more information on the study, titled "Employers, Workers, and the New World of Work," visit transamericainstitute.org
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Employer Beliefs May Not Match Worker Reality
A recent survey by Transamerica Institute shows that today's employees face mounting financial strain caused by inflation, insufficient benefits, caregiving demands, and shifting job requirements, among other factors. Although employers acknowledge these challenges, they may not fully grasp their magnitude and ramifications — including the impact on employees' emotional well-being.
Day-to-day financial security
Forty-three percent of workers say they have trouble making ends meet, and 26% have taken on a second job or side hustle to supplement their income. Although 86% of employers recognize that the high cost of living stretches today's paychecks, more than half express concern about workers moonlighting. This highlights a disconnect between employers' understanding of economic hardship and the realities their workers face every day.
Financial benefits
While 39% of employers believe their employees know "a lot" about personal finance, only 21% of workers say the same about themselves. Only 26% of employers offer a financial wellness program, leaving many employees without tools that could help them better manage their finances.
In addition, workers place high value on benefits that help alleviate financial stress, such as health insurance, retirement plans, and dental, life, and vision coverage. However, access often falls short of demand. For example, nine out of 10 workers say a 401(k) or similar retirement plan is important, but only six out of 10 employers offer one.
Caregiving demands
Thirty-six percent of workers are caregivers, including those currently caring for children, aging parents, or other loved ones. With long-term care costs continuing to rise, caregiving can create significant out-of-pocket expenses and lost income opportunities.
Although 93% of employers say they are supportive of caregiving employees, relatively few provide related programs. Of those that do offer support, the most common forms are unpaid leave (36%), paid leave (35%), online resources (22%), and backup care discounts or subsidies (22%).
Flexible work arrangements can help, and 93% of employers acknowledge the importance of such programs, yet available options remain limited. The most common offerings are flexible work schedules (54%), the ability to adjust schedules as needed (49%), and hybrid arrangements (37%).
Retirement (or not)
According to the Department of Labor (as cited in the study), almost a quarter of all workers are currently age 55 or older, and workers age 65 and older are projected to be the fastest-growing segment from 2024 to 2034. The survey supports this data, as 44% of workers expect to retire after age 65 — or not at all — while half plan to continue working in some capacity during retirement.
Nearly nine out of 10 employers say they are "age friendly," offering opportunities, work arrangements, and training and tools needed for employees of all ages to be successful. Yet just 72% of workers agree. And while 83% of employers say they support employees working past age 65, only 68% offer flexible retirement transition options, and just 39% offer a formal phased retirement program.
Artificial intelligence (AI)
Just 38% of employers believe employees are concerned about AI, while 44% of workers worry that AI and robotics could render their skills obsolete. Eight out of 10 employers use or are planning to use AI "to augment their human workforce," and 89% expect workforce impacts, such as job transformation (67%), job creation (50%), and job elimination (36%). As more employers adopt AI, many jobs will likely change, with implications for income security and future employment prospects.
Development and training
In light of the AI revolution, professional development will be increasingly important. Although 86% of employers say they are responsible for helping employees keep skills current, only 38% view talent development as a workforce management priority. And less than half of workers report that their job skills are up to date. In a labor market being reshaped by technology, inadequate training may leave workers less competitive and more financially exposed.
Mental health
All these factors seem to be taking a toll on employees' emotional well-being. Unfortunately, the survey found that nearly half of workers feel exhausted and burned out; 42% often feel anxious and depressed; another 42% feel unmotivated and overwhelmed; and 31% report feeling isolated and lonely. Although 70% of employers say they are concerned about employee mental health, just 27% offer an employee assistance program.
Looking ahead
As financial pressures on today's workers intensify, companies that strengthen retirement and health benefits, financial wellness programs, caregiving support, flexible work options, training opportunities, and mental health resources may be better positioned to support both worker stability and long-term business performance.
Source: Transamerica Institute, May 14, 2026 |
