You would think that employees acting under stress would search for possible downfalls, or weight the negatives in any decision more strongly. You would be wrong.
Here’s an odd twist: stress makes people unusually, ill-advisedly, positive. You would think that employees acting under stress would search for possible downfalls, or weight the negatives in any decision more strongly. You would be wrong. According to psychological researchers, decisions made under stress tend to pay more attention to the potential positives in an outcome and actually discountnegative information. Stated another way, when under stress, people will not trust information that could indicate a bad result in the making. And more confusingly, the stress the person is under doesn’t necessarily have to relate to the decision at hand. Experiments that showed this head-scratcher of an outcome were based on exposure to extreme cold at the same time as asking participants to decide some entirely other issue.
This could explain why employees who are under financial stress at home (for example, who have a new baby, sick parent, or child with special needs) would fail to take advantage of the company’s retirement benefits. Wouldn’t those employees see the need for being retirement ready even more than other employees? Nope. The stress they are under would cause them to be focused on potential positive outcomes. This is may be why gambler’s don’t step away from the table when they are losing.
Additionally, it’s worth noting that stress and anxiety are different animals. According to research at the University of Pittsburg, anxiety interrupts the neurons in the brain that are active in making decisions. Anxious brains, those with chronic anxiety and high levels of cortisol have a structure different from others. In other words, it is harder to make good decisions when you have long-term anxiety.
Health issues also spike stress at home, and are more than a financial drain. Health issues impact decision-making by placing employees under the same duress noted in the earlier discussion. Additionally, by seeking the reward of relief from a health issue, the employee with a health issue may make worse choices than the employee with financial stress. Experts also note that employees with addiction-related illnesses have compromised decision-making skills.
Plan sponsors may want to use this information to evaluate whether stress and anxiety are impacting their employees’ retirement readiness decisions. Plan sponsors may want to consider taking the following actions:
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.get xpress proposal