Financial Wellness starts with a diagnosis
With all the buzz around the concept of financial wellness in the workplace, Human Resource Professionals and Plan Sponsors are scurrying around for the ideal wellness programs to fit their vision of financial and occupational fitness. And while well-meaning, financial wellness is at risk of becoming a slogan more than a practice as the definition of wellness extends beyond just finances.
Sponsors seeking to implement wellness programs need to take a step back and put on their thinking caps…and maybe that doctor’s lab coat for a moment. The notion of wellness implies an effort to prevent some sort of malady, or sickness. So Sponsors should seek to understand the signs of participants not being well in the workplace.
Now, assuming employee financial stress is a major trigger to catching a “financial flu”, what are the signs to watch for?
Symptoms of impending financial sickness
Taking Loans against retirement savings
While employees may want to borrow from time-to-time against their savings plan, withdrawing against a 401(k) plan may be a sign of significant financial stress. Not to mention disrupt an otherwise orderly accumulation of retirement assts. Wellness includes understanding the concept of tax-deferred compound interest as well as the perils and risks associated with inability to repay loans to a retirement plan.
Seeking Payday Loans and Advances
Employees seeking so-called “payday loans” are subject to exorbitant interest rates, according to the Consumer Financial Protection Bureau, finance charges can equal up to 400% APR. An employee seeking this type of loan is likely in a desperate situation that may suggest extreme behaviors in spending or inability to budget. Offering assistance in short-term planning goals may be all that is needed.
Preventing simple medical issues
Employees who skip regular medical check-ups due to financial concerns potentially expose themselves and their employers to long medical absences. Offering a plan of regular health screenings as well as opportunities to encourage physical fitness is essential.
Habitual and unexpected absences
According to SHRM, 40% of HR and Benefits professionals have reported that employees took off work due to financial emergencies.
Being Distracted at Work to deal with personal finance issues
When employees try to deal with personal finance issues at the workplace it can cause stress. According to a Harris Poll 37% of employees spend an average of two hours per week dealing with personal finance issues in the workplace. Providing ample but limited time for employees to conduct personal financial activities in a private setting may have lasting benefit to employees.
Understanding these and other signs of possible financial stress will help diagnose and find solutions that truly provide wellness benefits to employees.
