Financial stress is a drain on productivity and engagement, and can result in instances of absenteeism to deal with financial situations or due to the resulting stress. According to the Financial Planning Standard Council, some 42% of Canadians ranked money as their greatest source of stress, but what are businesses doing to change this?
Employees who are stressed over their finances are less able to focus on career and personal goals, are less able to communicate effectively and request more time off to attend personal, legal and medical matters, according to The Credit Counselling Society in Toronto. The impact of financial stress on workplace productivity is hard to quantify, but a US study from the Consumer Financial Protection Bureau found that of those workers who are concerned about their finances, 39% spend at least three working hours a week thinking about or dealing with financial problems.
Researchers have found that financial distress affects the workplace. It can contribute to lower commitment to an organization, less satisfaction with pay, wasted working time dealing with finances, poorer health as well as workplace conflict. A further study claims employers need to recognize, that at any given time, around 15 per cent to 30 per cent of their workforce is seriously financially distressed.
Employers are key
Employers play an important role in providing money management information and assistance to their employees. This not only improves the lives of their employees, but it directly benefits the company. The workplace is an ideal platform for financial wellness building. Employers are able to reach large numbers of employees with a single program, whether that be a presentation on the importance of financial planning or a particular benefit scheme that gives employees a financial safety net.
Employers who use financial wellness programs as tools for recruitment, talent management and brand building are often able to attract more determined and more loyal employees. Research has found that staff happiness and turnover is lessened when an employer offers benefits on top of an employee’s salary. This could include long-term incentives such as pension plans or immediate peace-of-mind programs such as increased health coverage.
What can employers do?
Employers should personalize financial wellness programs and aim them at making their employees healthier. These programs should give employees new knowledge, and be objective, useful and effective for improving their financial wellbeing, without being condescending.
Three ways employers can help their employees prioritize financial wellness:
- Financially-focused employee benefits – Offering a financial safety net to employees is important. Benefits such as income protection, life insurance, a pension and medical insurance will all go a long way in making employees feel financially secure.
- Education – Bringing in financial experts and educating employees, whether one-to-one or in a group seminar, will help give employees that extra bit of financial support and give them the information needed to get their finances back in check.
- Workplace saving schemes – Employers should encourage employees to invest in their own financial security. Whether the company has connections with a bank or they are enrolled in an additional workplace saving program, these are all options outside the traditional benefit that will make employees feel more secure.
Return on Investment for Employers
Employers are often concerned about the cost and scarcity of organizational resources when it comes to educating, and delivering services, to their employees on financial wellness. What they don’t realize is the benefits these efforts will create for the company. An International Foundation of Employee Benefit Plan report estimated that companies that offer benefits could save $3 for every $1 they spend.
This three-fold gain for the company is great, but it also comes hand-in-hand with happier staff who are more satisfied with their job, more committed to the company, are absent for less days each year and overall are healthier people. Not only do companies make more money, they become a more fruitful place to work. What’s to lose?
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