Numerous studies examine the effects that financial stress has on employees in the workplace. Most notably, these include reduced worker productivity, increased absenteeism, and increased requests for salary advances and hardship withdrawals from company 401(k) programs. Like other forms of stress, financial stress places physical tension on an employee’s body, making them more susceptible to illness – effecting the number of sick days an employee must take and their ability to focus on their tasks in the workplace.
The Prevalence of Financial Stress in the Workplace
According to a recent IFEBP survey, four out of five employers report that their employees’ personal financial issues are impacting their job performance resulting in things like inability to focus at work, absenteeism and tardiness. This study from PWC shows that in the average workplace, general financial stress affects roughly 54 percent of workers and an additional 10 percent revealed that they were affected by student loans, specifically. This, in turn, means that 64 percent of a given workforce finds that their professional tasks are affected by their finances.
What Employers Can Do To Help
In light of the studies above, The recently-released eighth annual Employer-Sponsored Health and Well-Being Survey found that 84 percent of 141 large- and mid-sized companies surveyed now have financial wellness programs, up from 76 percent a year ago. Employers, so far, are often seeing success with these programs. As an International Foundation of Employee Benefit Plan report points out, estimates for ROI on financial wellness programs could be as high as $3 for every $1 spent. In fact, for a company with 1,000 employees, using HealthyCapital’s data to motivate improved health, simply helping 50% of an average workforce to better manage health conditions, offers potential annual savings of $2.5 million.
How Employers Can Help Employees with their Financial Wellness:
1. Brown Bag Lunch-and-Learn Sessions
Lunch and Learn sessions provide an inexpensive step that a company can take toward bettering their employee’s knowledge of financial wellness. In addition to improving awareness, these learning sessions provide employees with a set time to put down their work and focus on learning tips that can help to reduce their financial stress throughout their entire lives. When planning a lunch-and-learn sessions, be sure to find a non-bias, neutral voice, like a Certified Financial Planner. This will make your employees feel more comfortable and avoid providing them with an expert that emphasizes specific products based on what they sell. To learn more about how to begin a successful lunch-and-learn series, see the article here.
2. Technology Enabled Programs
Technology-focused programs provide an interesting feature; access to anonymity through private learning, as users complete the program at their own pace, on their own schedule, and in the privacy of their own computer or smartphone. Technology-focused programs are typically broken into two different categories:
Learning Module-Based Programs
Many financial wellness programs are online programs composed on learning modules – videos, articles, and similar resources that are completed with a quiz to test how well the user retained the information in order to receive ‘points’. Some employers have found that financially focused technology programs can experience low adoption due to employees’ concerns about their supervisors being able to see that they signed up – and how that might affect their superior’s opinion of their ability to handle money.
Holistic Wellness Programs
Other options for financial wellness programs provide the integration of physical health and financial wealth to create one, general wellness program that can be used by all employees. This provides an option that can take the potential stigma away from financial-specific programs. These types of programs also typically have a point system based on many different activities that the user can chose from, making for a more engaging and interactive process for the employees that helps them to enjoy learning about better health; both physically and financially. A study by Towers Watson found that when companies focus on both employee health and financial well-being, it results in increased productivity, a competitive edge in the marketplace, and an improved ability to attract and retain talent.
The Result of Educating your Employee Base on Financial Wellness
If 64 percent of your workforce is compromised due to Financial worry, the best way to solve the problem is by providing them with an effective set of resource. Whether choosing in-person resources or a technology-based program, providing your employees with resources to reduce their financial stress will, undoubtedly, teach them better ways to manage that part of their life – as well as positively affecting the culture of the workplace. As the studies above have shown, ROI can be seen through a decrease in absenteeism and an increase in productivity. All in all, by simply educating an employee base, employers can improve the culture of the organization while decreasing a major stress point of employees, leading to a strengthening of the entire workforce and allowing employees to live healthier and wealthier lives. To learn more, read our whitepaper; Building Wealth Through Wellness.