One of the biggest stressors in life is financial instability. According to PwC’s 2017 Employee Financial Wellness survey of 1,600 full-time working adults, 53% said they were stressed about their finances. Financial stress doesn’t only negatively impact employees, but also employers. It can cause employees to:
- Be more distracted and less productive at work;
- Take time off from work to deal with their financial issues; and
- Experience more health problems and call out sick.
It was found that 46% of those distracted by their finances spend at least three hours a week at work, thinking or dealing with issues related to their personal finances. In addition, 35% of employees who are stressed about their finances cite health issues caused by financial stress.1
Per a 2017 Bankrate survey, only 4 in 10 Americans said they had enough in savings to cover an unexpected $500 expense (e.g., car breaking down); 21% would rely on a credit card and another 20% would cut other expenses. Financial disruptions such as emergency expenses, reduced job hours or eviction notices can put even more pressure on individuals and families due to rising medical, housing and educational costs.
How can workplaces help improve employee financial wellbeing while also improving the organization’s bottom line?
Most workplace financial wellness programs are designed to prepare employees for retirement, but only 10% of those workplaces say their employees fully understand their retirement savings needs and the options available for meeting those needs. Low-hanging fruit interventions to address this issue include improving communications about existing benefits and providing education around 401K plans.
It is also important to expand financial wellness programs beyond retirement and increase employees’ financial literary and skills around topics such as:
- Day-to-day budgeting
- Debt management
- Short and long-term goal savings
- Emergency savings
- Student loans
Employers can consider:
- Surveying employees about their top financial interests and concerns, and host seminars, “lunch and learn” programs and/or workshops to address them;
- Adding student loan repayment as a benefit;
- Automating enrollment into retirement plans;
- Providing web-based/online resources; and
- Offering free one-on-one financial counseling.
It can be overwhelming for employers to gain buy-in from leadership and locate the resources to support a financial wellness program. There are a couple relatively simple starting points:
- Scan your community and see what resources are available. Is there another organization you can partner with?
- Leverage any existing benefits your organization may already be offering. For example, an often-underutilized resource is Employee Assistance Programs (EAP). Many EAP providers offer financial counseling and stress management advice. If your EAP program is being underutilized, there may be an opportunity to improve the communication and marketing around it – employees might not realize this resource is available to them!
Employee wellbeing is a key component to the success of a business and it is in an organization’s best interest to help reduce the financial stress of their employees.