Stress and decision making about retirement readiness

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.
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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.
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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.  
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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.
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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:
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• ‍Evaluate employee extracurricular stress: Plan Sponsors may want to start by determining the level of stress and anxiety their employees currently have. Anonymous surveys sent by email can be an easy way to gather that information.
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• ‍Eliminate Environmental Stress: While not every work environment can become spa-like in their tranquility, there may be simple fixes to reduce environmental stress. One easy way many companies using open floor plans have solved noise concerns is to move all jobs with functions that heavily rely on phone interaction to a separate room. Some employees may have simple, low cost suggestions (such as fixing overhead lighting or adding live plants to common areas). One health care facility turned a small, unusable corner for work (too small for a desk) in to a “quiet spot”, complete with a generous chair and table top fountain.
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• ‍Engage Outside Interests: Employees may have more positive interactions with their coworkers if they share common interests. Fostering those common interests with time for clubs or groups at lunch can help reduce stress. While at first this may seem like a budget breaker (extra catering?), the costs can be as small as allowing a conference room for lunch time knitting, an after work chess club, or a shower for the early morning running group.
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• ‍Emphasize Employee Assistance Programs: By making mental health, and the causes of strain on mental health such as financial or legal matters, not taboo subjects, Plan Sponsors can reduce the stress on employees. Plan sponsors can emphasize employee assistance programs by sending emails to employees with reminders on how to use the program, using case studies to show how employees may benefit from these programs, and having flyers in bathrooms or stairwells so that employees can access information anonymously.
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• ‍Elevate the Communication game: Regular performance reviews, clear and consistent task assignments and a clear mission and vision are all key points that help employees feel stable in their jobs. Plan sponsors may want to review (or generate) their internal communications plan to ensure that the business is clear and consistent in its messaging to employees.
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• ‍Exemplify Balance: Asking Managers to ensure that their own stress levels are in check and their conflict management skills are operating well will motivate employees to do the same. In other words, Marsha from Accounting can’t expect her employees to resolve conflict well if she is snapping at Jude from legal. One simple task managers can do is to schedule lunch breaks for themselves to encourage employees to do the same.