The evidence is in and it’s not encouraging. Financial distress is pervasive in America.
According to PricewaterhouseCoopers’ 2016 Employee Financial Wellness Survey:
Or consider these findings from a survey published last year by CareerBuilder:
And it’s not just those who make the least who struggle. CareerBuilder found that people in all salary ranges are vulnerable to unexpected financial events:
So, financial security and wellness have proven elusive to many of today’s workers. They express anxiety and uncertainty that is almost certainly debilitating in terms of their performance at work.
What can be done about it?
It’s a deep question that invites speculation and discussion on many fronts. But let’s stick with the options and actions that may be within the immediate purview of employers like you.
Recognizing that a financially distressed workforce is a costly, unproductive and dispirited one, here are three key steps that employers can take to turn things around:
Financial Education and Counseling. In recent years, many companies have stepped up their investments in financial education and even one-on-one counseling services – addressing everything from budgeting to debt management to investment issues.
However, several challenges have emerged.
Employees, for instance, often don’t know these services are available to them. And even when they are aware of these offerings, they often don’t take advantage of them.
That’s why companies are increasingly tailoring these education services for specific concerns (like college loan debt assistance for younger workers or retirement support for older ones). By increasing the specificity and relevance of the service, they hope to increase adoption.
Financial Benefits and Savings Plans. It’s valuable to employees to have an employer acting as a clearing house of possible benefit options – a party that can evaluate the offerings of potential vendors on behalf of their people.
Recognizing the power of such benefits to enhance financial fitness and employee engagement, companies can provide their people with an array of financial benefits – everything from 401(k)s to Health Savings Accounts (HSAs). Some companies have even taken the added step of making enrollment the default option – acting on research that suggests participation levels soar under such circumstances.
Accelerated Payment Options. Less recognized, but nevertheless critical is the element of employee payment itself. When members of your workforce are financially strapped, the potential for a difficult and unexpected financial event – one that proves distracting or them into deeper debt – is high.
While payday lenders and credit card companies are only too happy to step into the breach, it’s important to recognize there are other options. Direct Deposit is certainly a foundational action – one that ensures payments are promptly moved into an employee’s account on pay day.
But you can also offer your employees timely access to the income they’ve already earned. At no charge to you as an employer (or impact on your cash flow), you can support your employees in a dignified and friction-free way should the employee unexpectedly need access to these funds.
Employers like you know a multi-pronged approach to financial wellness is necessary to ensure employees are fully engaged and productive. Otherwise, their financial stress and uncertainty eats away at your organization – and your ability to serve the customers that are central to your success. Your growth, as it turns out, is inextricably tied to the financial wellness of your people.
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