Nov. 30, 2005--With wage growth barely keeping up with inflation, employees of both small and large companies are feeling more burdened by the combined weight of personal debt and higher costs of living, according to a recent survey.

ComPsych, a Chicago-based human resources consultancy, surveyed 1,000 businesses of all sizes and found that more than half of their employees feel more financially stretched than they were a year ago. Twenty four percent of employees said they have accumulated more debt and saved less, while 28% consider themselves "one major setback away from a financial disaster.

"With record levels of consumer debt, and rising gas prices and home heating costs, a lot of issues are coalescing on consumers, said Richard Chaifetz, chief executive of ComPsych. "As interest rates go up, we're getting closer to the day of reckoning.

ComPsych's member companies range in size from as many as 450,000 employees to as few as five. Data from the survey, which was conducted two months ago, suggests that employees' perception of their personal financial security is linked to income levels and occupations, not the size of the company that employs them. ComPsych surveyed approximately 100,000 employees from the 1,000 businesses it contacted.

Chaifetz said that companies he works with have increased salaries between 3% and 3.5% per year. Consumer prices, however, have risen 4.9% so far this year, compared to 3.3% in 2004, according to the Bureau of Labor Statistics. For eight of the past 12 months, inflation has outpaced average weekly wage growth nationwide.

"Employers need to be aware that employees are stressed financially, and distracted from their jobs because of it, Chaifetz said. He advocates personal-finance programs to keep employees focused on their job.

But finances are just one set of distractions among many, according to Roger Harris, president of Padgett Business Services, a small-business consultancy. And small businesses may not be able to offer financial advisory services to their employees. Instead, Morris said, small businesses should focus on offering "a good work environment and paying competitive salaries.