Employee Finances Need Screenings Too
By Alison Hinson
The financial stress that's affecting a majority of workers today can pull your company down faster than you realize. The good news is that you're in a position to turn things around for both your employees and your company.
According to a American Psychological Association Stress in America survey, approximately seven out of 10 Americans report that money is a significant source of stress. Financial issues affect more employees today than smoking and obesity combined. While 20 percent of the U.S. population smokes and 30 percent are obese, more than 50 percent may be concerned about their finances.
Paycheck to Paycheck
According to CareerBuilder, nearly half of the U.S. workforce lives paycheck-to-paycheck. Increased income does not necessarily solve the problem: 14 percent of people with salaries over $100,000 also live paycheck-to-paycheck.
Little Savings Occurring
Many people save little, if any, money at all: 36 percent of workers do not put any money into a retirement savings plan; 33 percent don't put any money aside for personal savings each month; and 30 percent save less than $100 each month.
Financial Stress Grows
Living paycheck-to-paycheck and failing to save money results in a high percentage of stressed employees. Financial stress, just like any other kind of stress, leads to health issues and reduced productivity.
According to Elizabeth Scott, M.S., anxiety over stress can negatively affect your health and productivity in several ways, including:
- Increased eating, drinking and smoking due to the inability to constructively cope with financial stress
- Reluctance to spend money on doctor visits, so small health issues may escalate into larger problems, which result in potential lost work time and more stress
- Loss of sleep, which can impair the immune system and cognitive abilities, leading to illness and further poor financial decision-making
Problems Spill Over into Work
When your employees show up for work, they bring their financial concerns with them. An article in a 2005 Delta Pi Epsilon Journal noted the following problems when employees experienced personal financial stress:
- Increased absenteeism
- Frequent personal phone calls
- Lack of ability to concentrate
- Personal bankruptcies, which may reflect badly on the�company
- A risk to your company of fraud and/or theft
All of these issues will negatively affect the productivity and profitability of your company. Here are some suggestions to help your employees deal with financial concerns and the resulting stress they may cause.
Recognize Their Limitations
Talking to employees about your 401(k) plan is not a solution. People who can't pay their electric bill or heat their house are not going to enroll in a retirement savings plan.
Offer People Resources
Let them know who to contact when they are worried about their personal finances. Whether it is an EAP counselor or a sympathetic, nonjudgmental and financially savvy HR rep, employees need to know who they can reach out to for help and support.
Never underestimate how embarrassing it is to have personal finance issues. It takes a lot of courage for a person to admit to anyone, much less a co-worker, that he/she is in financial trouble and afraid of what may happen to his/her family. Make sure that designated staff members provide supportive advice rather than criticism and that they will listen without judging. Remind your HR staff that if an employee is concerned enough to reach out for help, the last thing they need is to be told that they are at fault.
Let People Know That They Are Not Alone
Statistics (as sited in this article) indicate that more than half of your employees are probably living paycheck-to-paycheck. Although many people assume that this is only true of lower-paid workers, the survey results disprove that assumption. Higher-paid employees may be better at hiding financial issues, but many are suffering the same issues.
Make Sure People Know Their Options
Discuss the cost-saving opportunities available through flexible spending accounts, retail discounts, ridesharing, and other company initiatives.
Educate Your Employees
Offer classes to help them understand basic financial concepts like budgeting, credit, and savings. Even though people deal with money every day, most have never taken a class on how to manage their personal finances. Plan the structure and content of the course to ensure participants' comfort, so they can relax and absorb information instead of feeling defensive.
Good for Everyone
Smoking cessation and healthy eating classes have had a positive impact on employee health. Now is the time to introduce classes to address the personal finance concerns and resulting stress that are so pervasive in the U.S. workforce.
Helping your employees understand how to deal with personal finances can improve not only the financial health of your employees, it will increase the productivity and profitability of your company and make your company a great place to work.