Here's How to Help Your Employees Achieve Financial Wellness
Studies show that one in three employees say that issues with their personal finances causes a distraction while at work. Here are some ways to help alleviate that stress.
From increases in employee illnesses to lost productivity and excessive time off, the knock-on effect when an employee's financial wellness deteriorates can have significant and long-lasting implications for today's employers. That's according to PwC, reporting on the impact of employee financial stress on an organization's bottom line.
PwC reports that 53 percent of employees feel stressed when dealing with their personal finances, while 46 percent report that working on their finances generates the most stress in their lives. While employees from all generations experience some form of financial stress, 34 percent of millennials and 44 percent of Gen Xers admit to feeling stress related to their personal finances, according to PwC. More females than males worry about their financial health, with 59 percent of those reporting financial stress being female.
This January is Financial Wellness Month. Use this event as an excuse to provide employees with the education, training and tools to assume control of their financial situation.
Dangers of Employee Financial Problems
There's another problem stemming from turmoil in an employee's personal finances. Unfortunately, when employees experience financial stress, they sometimes steal from their employers. The Association of Certified Fraud Examiners (ACFE) notes that when investigators analyze the behavioral "red flags" displayed by perpetrators, 45.8 percent of employees that committed fraud were living beyond their means, and 30 percent were experiencing financial difficulties.
While only a tiny percentage of employees revert to fraud, ACFE reports that the median loss associated with occupational fraud is $150,000, not to mention the costs to investigate the fraud and remediate internal control deficiencies.
Best Ways to Lend a Hand
So what can organizations do to alleviate the financial stress in their employees' lives? Consider the following:
- Publicize your support for employee financial wellness. Make employees aware of your support for Financial Wellness Month by developing a list of personal finance facts to share throughout the month, such as how to diversify an investment portfolio, or innovative ways to pay down debt. Consider dedicating a portion of your website to house links to relevant resources related to budgeting, debt management, tax planning and investing.
- Provide personal finance workshops. In order to help employees reduce debt, budget and save for retirement, offer in person or online training. Check with your organization's 401(k) provider, as they often provide personal finance training for free.
- Revisit your employee support program. If your business provides an employee support program, revisit the components of the program to ensure that it includes services such as access to financial planning, debt counseling and retirement planning.
According to PwC, one in three employees say that issues with their personal finances causes a distraction while at work. Consequently, when employees lose control of their personal finances, their employers suffer. The journey toward financial wellness starts with education. In exchange for helping employees improve their financial health, employers can remove distractions and increase the level of engagement. The Society for Human Resources Management reports that happy and engaged employees result in greater productivity, lower employee turnover, less absenteeism and greater profitability.