By Naomi Adams Bata
Vice President, Financial Health Network
Just over a year ago at the 2019 EMERGE: Financial Health Forum, Jennifer Tescher announced the Financial Health Network’s new name and tagline: Financial Health for All. Our organization rebrand was a rallying cry to encourage other organizations –our Members, funders, industry thought leaders –to invest in programming and messaging around financial health to help employees, consumers, and other stakeholders build financial health muscle. Beyond helping employees and consumers on their financial health journey, financial health offerings are a good brand differentiator, and also have impacts to an organization’s bottom line.
We’ve long known from research and practice about the business case for advancing financial health. A recent PwC study showed that half of all workers were stressed about their finances. Employees who are distracted by financial stress at work are less productive, according to research we released with Morgan Stanley last year. For employers, this translates into millions of dollars in lost productivity, absenteeism, and increased turnover.
Fast-forward a year later to spring of 2020. In April, unemployment approached a record high of 14.7% after the novel coronavirus shut down workplaces and schools, and disrupted much of our traditional social networks as we knew them. Today, financial health is not a nice-to-have; it’s a need-to-have. Just ask the nearly 20 million Americans who lost jobs or are furloughed. The students. The gig workers. Those in the service industries. Those who are still waiting on stimulus money. There has never been a more acute need to address the financial health of Americans.
Financial Health Impacts Have Never Been More Acute
The severity of the COVID-19 crisis became clear to our team almost immediately. We kicked it into high gear to leverage our research and findings in order to show just how challenging the crisis would be for Americans to weather. For the last few months, we have utilized new studies to dig into the devastating financial health impact the crisis has had and how businesses and employers can step up to the plate. Many of our Members and other industry leaders across sectors stepped up to help their customers and employees, too.
Here are some of the highlights of our work:
- The coronavirus has illuminated the impacts of adapting a “financial health” mindset when dealing with customers, shareholders, and constituents. We know the crisis has hit certain groups even harder. According to recent U.S. Financial Health Pulse data, more than a third of Americans (33%) lost income during the pandemic, specifically impacting those who were already more vulnerable, including low-income households, young people, women, and Black and Latinx Americans.
- What’s more is that half of Americans (54%) have dipped into emergency savings since the COVID-19 outbreak began, and nearly a quarter (23%) already used most or a lot of their stimulus money, according to a new national survey from BlackRock’s Emergency Savings Initiative (conducted online May 7-11 by The Harris Poll).
- This year, our #FinHealthMatters Day theme focused on the role of employers and the workplace in helping employees achieve better financial health. We’re thrilled to partner with MetLife Foundation and others on this important work.
- The Financial Solutions Lab Accelerator, in partnership with founding partner JPMorgan Chase, has specifically chosen to focus on worker and student financial health for the sixth cohort, currently in progress. The teams are working to build fintech solutions that can address pain points for these groups. We’re excited to see how each team is evolving their business to address the current challenges around financial health.
Walking the Walk on Financial Health
The coronavirus escalated the already precarious state of financial health of Americans everywhere and Financial Health Network Members took notice. In 2020, we kicked off our Employer Advisory Council to help organizations address the financial challenges of their workforce and find strategies to improve financial health. A dozen companies from retail, financial services, insurance, healthcare and transportation are participating.
There are also more than 64 member organizations that are currently measuring the impact of financial health on their employees and customers, with 44 of them in our Financial Health Leaders program. This group has measured the financial health of more than 8.2 million people with the aim to dive deeper into the impacts of financial health on their customers and employees. Such information will be vital to moving forward post-virus.
While it was no secret to us, the crisis has highlighted that financial health is a make-or-break for most Americans, and there is still much work to be done.
To read more about the impacts of the pandemic to financial health, visit the COVID-19 resource page here.
Read more about financial health measurement and case studies here.