We take the time to set resolutions for our health and well-being – eating better, working out, quitting smoking – but what about being financially fit? Believe it or not, your employees’ financial well-being affects your company’s output. Seriously! Nearly half of American full-time workers say they worry about personal finances during work hours. And 29 percent say they deal with personal financial issues on the job – often for two to three hours a week. So, it’s kind of a big deal. Should employers consider adding credit counseling and free financial planning assistance? Maybe…
A recent study by Towers Watson found that when companies focus on both employee health AND financial well-being, it results in increased productivity, a competitive edge in the marketplace and an improved ability to attract and retain talent. Here’s the advantages to taking an interest in your employee’s financial well-being:
Better Adoption of Financial Programs
Employee participation in health and flex care plans, 401k benefits, employee financial education programs, and other wellness offerings helps employers negotiate premiums on the open market. Better adoption of financial programs also strengthens the overall impression of company benefits and makes retention and new employee acquisition an easier sell.
Better Employee Health
Traditionally, we consider wellness to be covered by physical activities and better eating habits, but wellness is closely related to financial health, too. Extreme stress leads to worsened health, and therefore, less time spent in the office being productive. Extreme stress can cause employees to pick up unhealthy habits, too, and those unhealthy habits can exacerbate an environment of stress.
Fewer Distractions and Higher Productivity
Workers who struggle to pay bills and balance their finances outside of work often use up time in the office trying to sort out those personal matters. 37% of all employees spend three full hours or more a week at work thinking about or handling their finances. Over a year, this adds up to 156 hours of lost productivity. Multiply that number by the size of the workforce, and productivity because of financial stress begins to look like a very serious issue. If equipped with better financial education, employees can stay on top of their financial responsibilities, experience fewer emergencies, and remain better focused while at work.
Better Commitment and Improved Morale
If employees feel that their employer has a vested interest in helping them succeed in building and maintaining their current finances and financial future, that sense of security helps improve the bond between business and employee.
Less Strain on the HR Department
Human resource expenses go down when employees are in a position of healthier financial well-being. Lower financial stress and better employer support can result in more satisfied employees, meaning a smaller burden on the HR department. Financial freedom also reduces the number of wage garnishments and payroll advances HR must handle.
Financial stress can affect employees at any income level – it’s not how much you make, it’s what you do with what you’ve got. Employers are not only in a key position to provide money management information and assistance to employees; they will also benefit directly if they do. Does your company offer free credit counseling or access to financial planners? Do your employees take advantage and find it useful?
Vice President – 401k Plan Administration