Managing financial stress has employers looking at the “whole” employee-base. Managing financial stress for employees was a high priority for employers before the Covid-19 pandemic, however, we are now one year into the pandemic and economic and financial uncertainty are realities for Americans. The employee’s financial stress has been exacerbated by the hardships wrought by the pandemic. The difficulties include, job losses and reduced hours.
Why should employers care about managing financial stress? For starters, financial stress is a known detriment to a company’s bottom line. Businesses with financially stressed employees suffer from reduced employee productivity. The productivity-loss can manifest via higher instances of absenteeism and presenteeism. (This occurs when an employee is at work, but “checked out” mentally.) Consequently, managing financial stress through wellness programs are a must-have for employers. This is especially true for employers who are dealing with employees who are holding on-to stress. Employees who are stressed over job related productivity issues are not delivering their finest work!
Financial wellness programs have been shown to move the needle in a good direction. In fact, 90% of employers report that financial wellness benefits have positively impacted their workforce, according to a SmartDollar study cited in a recent Employee Benefit News article. In addition, benefits that address financial stress are a number one priority for employers. Without financial wellness, employers fail, Employee Benefit News opined.
The same study found that three-quarters of employees struggle with their finances and live paycheck to paycheck. Money stressors do not always stay at home. Stress can come from the workplace, poor health, and employee turnover. These result in high costs for employers. However, employers are also well-positioned to help. If conducted properly, financial wellness not only improves employees’ financial health, it also boosts companies’ bottom line.
According to the SmartDollar survey, 81% of employers have seen improvements in their teams since offering financial wellness programs; and, 88% convey their employees are less stressed. More than 90% of employers also say financial wellness programs help improve their recruiting efforts. This can also make companies more attractive to prospective new hires.
In addition, 62% of employers feel “extremely responsible” for their employees’ financial well-being during the pandemic, according to a Bank of America study. The increased uptake in managing financial stress within the last year has kept employers very busy over the prior 12 months. Employers such as Prudential, Voya, FinFit, and Gusto have all expanded their programs. The benefit packages now include benefits such as early wage access, financial education programs and student loan repayment. Moreover, 94% of employers say employees with healthy finances are beneficial to their business. The upside is clear: Employers who take an interest in managing financial stress, help employees and their organizations to achieve long-term success.