By Brenton Peck, Financial Health Network
“Dear Employer, I need help.”
I’ve been taking small steps to get ahead — picking up a few extra hours at work, saving diligently in my bank account, and working to rebuild my credit score. But this month, my son had an ER visit, which I thought was covered under his father’s insurance — it wasn’t.
Eight-five percent of Americans are anxious about their financial lives — and it’s not just low-wage, hourly workers that are affected. Financial stress is not left at home; it’s brought into the workplace.
As a bookkeeper for a tax preparation agency, I’m fanatical about budgeting. A few years ago I got in credit card debt, but I’ve sworn off all forms of debt since then. My financial system works for me on a month-to-month basis. But as I near retirement, how am I going to survive? I’ve got access to healthcare, but I’m worried I don’t have enough money saved.
These quotes may be imaginary, but the fact patterns behind them are real. They are among hundreds of similar stories collected from real workers through the US Financial Diaries project — and they illustrate a larger trend in the U.S. today. Millions of American workers — your colleagues, your family members, your neighbors — are financially stressed. And, it’s also easy to imagine that — as dedicated of workers as they are — they cannot help but bring that stress to work.
Businesses Aren’t Offering Adequate Financial Assistance
Many organizations offer workplace financial wellness and employee assistance programs (EAPs) to help their employees in and outside of the workplace. Many of these approaches focus on financial education, financial coaching, or referrals to social services programs. But these narrow offerings make some dangerous assumptions about employees’ financial lives. Instead of starting at a place of understanding, they tend to offer pre-packaged services that are convenient for the business.
The cost of financial stress at work is extremely high, so why aren’t we doing more to build “employee-centric” financial wellness strategies?
What Companies Can Do — and SHOULD Do
There is a strong business case for investing in employees’ financial health. Financially stressed employees have increased absenteeism, turnover, and healthcare costs. They manage personal finance issues at work and tend to be more distracted. Employees dealing with financial matters on the job alone could cost employers $7,000 per employee per year. Yet whether or not your employees are explicitly asking for help, they are looking for it.
So what can an employer do? Start by asking a few foundational questions:
- How financially healthy ARE our employees? What specific financial issues are they actually struggling with?
- Are we working to address their specific challenges, or are we simply offering what’s convenient?
- Are we able to track success or monitor changes in our workforce’s well-being over time?
- What “best-in-class” financial technology or education solutions already exist that we could offer? Does it make financial sense for my company to do that?
- How much could focusing on financial health save my organization?
Employers need to engage with these questions, and understand the fundamental financial behaviors of their employees. To improve employee financial health, first you need to understand your workforce’s financial challenges. You can then build a comprehensive approach that combines financial education with access to affordable, high-quality financial services — that incorporates behavioral insights to help employees achieve stability and reduce stress.
Building a Workplace where Employees can Thrive
There is a big opportunity right in front of you: an opportunity to measure and improve your workforce’s financial health. Rally the leadership team in support of employee financial health, talk to your employees and understand their financial health needs, track and measure your progress. Doing so will save your company significantly and contribute to a happier, more productive workplace.
When I faced an unexpected expense that I couldn’t cover, I walked straight into my HR office. They talked me through options for affordable credit and helped me download an app to automatically save money I didn’t even know I had. Instead of missing work to deal with my problems, my company became a partner with me in finding the solution and setting me on a path to long-term stability.
Wouldn’t it be nice if THAT’S the type of assistance you provided to your employees?
Brenton Peck is a consultant and senior manager at Financial Health Network, the U.S. authority on financial health. If you’re interested in partnering with Financial Health Network to measure your employees’ financial health and review your employee assistance program, contact Brenton to schedule a call. >>