Dive Brief:
- Cost of living has become a drag on career growth, according to a recent survey of U.S. adults by online learning provider Penn Foster, with 1 in 4 respondents saying they felt less confident about their ability to build a stable career than they did three years ago.
- Relatedly, workers said they’re angling for more affordable training options. A majority, 70%, said they would spend no more than $2,500 on training for a new career, and a similar share preferred to complete such training in less than a year.
- Financial pressures have been building within the workforce for several years, and the trend is expected to continue as fuel, food and healthcare prices grow. Meanwhile, employers face a call to invest in employees as technological change advances.
Dive Insight:
Employers are likely very familiar with employees’ affordability concerns after more than a year of pessimistic findings on that front. About one year ago, increased demand for food and household assistance underscored the notion that paychecks have not kept pace with inflation.
Recent economic data show little reason for optimism. August’s consumer price index for food measured 2.7% higher than it did at the same time last year, while heating oil prices have already hit record highs in some states. Employers also expect double-digit percentage healthcare cost increases in 2027, and employees will likely be asked to shoulder some of that trend, according to the National Alliance of Healthcare Purchaser Coalitions.
Organizations may underestimate employees’ financial concerns and overestimate their financial well-being, Bank of America found in a July report. It also found that most employees were worried about inflation and cost of living, with unexpected expenses and increased debt payments contributing to those fears.
Against that backdrop, workers often pay out of pocket for training not covered by their employers, according to data published by the University of Phoenix and The Harris Poll last year. Cost is a common barrier to professional development, the organizations noted, which may underscore the need to place more emphasis on work-based learning.
There is also the issue of so-called “ghost growth,” in which employees experience a modicum of career advancement without any of the enhanced pay, promotion or authority typically associated with that advancement. Coupled with tighter learning and development budgets, employers may find themselves in a difficult spot as technological change weighs heavier on their talent management frameworks.
Developmental efforts may yield benefits beyond a more prepared workforce; a 2024 Gallagher report found that career development is key to improving engagement and retention.
