Seventy-eight percent of Americans live paycheck to paycheck according to Career Builder. Further, Bankrate reports that Americans also can’t cover a $1,000 emergency without borrowing money.
Unfortunately, most employees fall into these staggering statistics. Although many people don’t like to talk about money—especially their troubles with it, most of us struggle in some way and could benefit greatly from sound financial advice, debt reduction and changes in our spending habits.
The terms “financial wellness” and “financial well-being” have been buzzwords in the employer wellness industry for the past few years. Many Hylant clients have been interested in learning about financial wellness programming they could offer to their employees.
Employers often offer 401(k) planning sessions and lunch-and-learn sessions with a local credit union or financial planner, but we’ve found that to truly help employees reach a place of financial freedom, employees need more support. Personal financial management is 80% behavior modification and 20% head knowledge. Spending habits are ingrained in our daily lives and are driven by factors like our personality, emotional state, financial knowledge and learned behaviors over time.
Helping employees better their financial well-being takes more than understanding their 401(k) plan options or a one-time lunch-and-learn on budgeting. It takes a comprehensive strategy that helps employees change their spending behaviors.
How Does Financial Stress Affect Employees?
According to their Stress in America survey published in November 2017 by the American Psychological Association, 62% of Americans report being stressed about money. That stress could put them at a higher risk for lower-quality health. Financial stress has been linked to migraines, cardiovascular disease, work absences, insomnia and more. Science suggests that it also can negatively affect mental health and contribute to depression and other mood disorders.
According to an International Foundation of Employee Benefit Plans survey, 80% of employers report that personal financial issues of employees are also impacting job performance. These issues manifest as:
- Increased stress (reported by 76 percent of employers)
- An inability to focus at work (60 percent)
- Absenteeism and lateness (34 percent)
What Do Employees Need?
To help them, you must first find out what your employees are struggling with and what kind of assistance they would like. Surveys or focus groups can be helpful in obtaining this information. Monitoring the data you already have can help as well; data points like the number of hardship loans, retirement plan participation, etc. can give insight on what your employees need.
For example, if you find that your employees struggle with debt and lack sound resources, GreenPath Financial Wellness may be a good solution. Financial well-being coaches can walk employees through financial counseling, debt management services and financial education tools.
SmartDollar (Dave Ramsey) is another reputable program. This program walks employees and their spouses through the seven baby steps to financial freedom through an engaging, self-paced platform. The SmartDollar platform provides a personal financial assessment, videos, and budgeting tools to help employees change their spending behaviors, reduce debt and save for their future.
No matter what your employees are struggling with, I encourage employers to consider a comprehensive approach to financial well-being. Finding a platform or program that can help employees understand their current spending habits and ways to improve those habits, get out of debt and save for their future can improve their stress levels, physical health, productivity at work and even their relationships at work and home.
The above information does not constitute advice. Always contact your employee benefits broker or trusted adviser for insurance-related questions.
