Here are a few reasons why financial wellness is a critical part of employee well-being:Finances are a major stressor.
Work isn’t the only thing stressing employees out ─ money can be a huge source of anxiety. In a 2015 PwC survey of working adults in the U.S., 45 percent of respondents said dealing with their finances is stressful.
For some, money can be a constant source of stress. In fact, a 2015 report conducted by the American Psychological Association (APA) found that 72 percent of adults feel stressed about money at least some of the time, and 22 percent experience extreme financial stress. When it’s extreme, health suffers. Some respondents said they thought about skipping or actually did skip doctor visits because of financial concerns.
The same APA study found that those in lower-income households with extreme financial stress are more likely to engage in unhealthy behaviors to manage that stress. Think watching TV for hours, ice cream binging and drinking one too many to manage that stress.
We know that chronic stress is unhealthy on its own, but financial stress multiplies the impact. People may avoid health investments to save money.
Managing finances takes time.
Managing finances isn’t just stressful, it’s time-consuming. Without control of their financial health, employees bring their worries into the workplace. In fact, 37 percent of those surveyed by PwC said they spend three or more hours at work each week thinking about their personal finances.
Some employees even miss work due to money woes, according to a SHRM survey in June 2014. Among HR pros surveyed, 37 percent indicated that employees had missed work because of a financial emergency. And another study published by Rand in 2015 found that lack of sleep, financial concerns and taking care of family members are negatively associated with productivity.
Stress is distracting — and when employees worry about their financial wellness, they lose focus and are less productive in the office.
Employees want support.
Employees feel the burden of all this stress, and they want their employers to help support financial wellness.
Although the SHRM study found 81 percent of HR professionals said they provide retirement planning to their employees, a majority don’t provide credit score monitoring or financial literacy training.
But employees, especially those just out of college, want financial planning benefits.
In a 2015 survey of employees ─ published by Quantum Workplace and my company, Limeade — almost 40 percent of employees younger than 25 said they wanted their employer to provide these benefits. Employees who feel stress from money issues are looking for help to improve their financial wellness.
Financial wellness improves engagement.
In our study, 71 percent of employees surveyed said they want standard-of-living raises — but only 31 percent of employers provide them as financial benefits. I’m a big fan of market — and merit-based pay — but employers should be aware of cost-of-living realities, especially for lower-paid employees.
Cost-of-living adjustments account for increased living expenses due to inflation. They may alleviate stress and allow more work focus. When you give employees these raises, they’re 15 percent more engaged, on average.
Providing financial benefits also shows employees that the organization cares about them as individuals, inspiring loyalty and motivation. When employees feel their employers care about their health and well-being, they’re 38 percent more engaged.
Investing in financial wellness boosts the overall well-being of employees, increasing their health, productivity and engagement.
How do you support financial wellness?