It’s three days until payday, and your favorite employee, Steve, has two options: fill his gas tank to get to work or pick up groceries. He decides to fill his tank with $5 and count the quarters under his couch cushions to buy a loaf of white bread and peanut butter.
This paycheck-to-paycheck lifestyle is far more common than you can imagine. As a result, most people feel some degree of stress when it comes to their financial well-being.
The American Psychological Association’s report, Stress In America, from February 2015 found that 72 percent of adults feel stressed about money at least some of the time, and 22 percent experience extreme financial stress. These extreme cases can harm their health, leading to a vicious cycle, such as skipping doctor visits because of financial concerns.
Guest post by Brad Delmore, Business Development Manager at LifeWorks.
Of course, this kind of financial stress also has an impact at work. Rand’s 2015 report, Health, wellbeing and productivity in the workplace, found that lack of sleep, financial concerns, and taking care of family members all influence productivity, and not in a good way.
The good news is this: Employers can help employees live healthier, happier lives by assisting them when it comes to better managing their finances.
Here are a few ways that forward-thinking employers can do this:
Budget Planning Workshops
Without a budget, employees may struggle with managing their bills and continue to live paycheck to paycheck.
The International Foundation of Employee Benefit Plans (IFEBP) found that nearly half of all organizations rate their workforce as “only a little bit” or “not at all financially” savvy, according to their 2016 survey, Financial Education for Today’s Workforce. This is why companies need to start investing in helping their employees with personal finances.
One of the most effective methods of educating staff on financial well-being is to offer voluntary classes and workshops. Only 23 percent of employers in North America currently make financial literacy education available. Of those employers who do offer some form of financial education, 67 percent of them rate their initiatives as successful.
Bring in financial consultants to host budgeting workshops that can ease the burden of financial stress on employees. Employees will learn the basics of creating a spending plan, managing checking and savings accounts, and, most importantly, developing the confidence to take control of their finances instead of letting their finances take control of them.
401(k) and Retirement
The IFEBP study mentioned above also found that 60 percent of employees were stressed about the troubles they experience trying to save for retirement. Empower employees by offering consultation services and provide online courses that help them determine what retirement plan best meets their needs.
To ensure they keep their retirement planning top of mind, consider starting automatic enrollment. This way, employees are immediately contributing to their retirement funds without delaying. If they don’t want to contribute, they can always elect to have none withheld.
More importantly, you need to communicate better. Sending out materials via email is a flawed, passive approach to educating your team about planning responsibly for their future. Instead, conduct one-on-one meetings to better understand their needs and help them individually prepare for retirement.
Financial Coaching and Counseling
Employees need to understand their spending habits and find where their own strengths and challenges lie when it comes to financial management. Provide them with financial coaching services through an employee assistance program. EAPs are a great tool for proactively approaching this problem because they offer educational resources to help employees prevent financial crises.
Set up private coaches for your team. Employees will appreciate the convenience of setting their own schedule with a coach and maintaining an ongoing appointment until they reach their goals.
Coaches help employees set goals and further understand what emotional triggers may be causing them to hurt their financial well-being. When employees start to make spending decisions that are harmful and based on emotional triggers, coaches can hold them accountable by helping them reflect on why they’re trying to break these habits and encouraging them to stay focused on their goals.
Over the course of time, coaches and employees build a rapport. This eases the stress of meeting with a coach and, once they start to see results, may even make it a pleasant experience for employees.
Between credit cards, mortgages, and student loans, it’s no secret that most of your employees are probably carrying a sizable amount of debt. It’s one thing to carry debt; it’s another to struggle with managing it.
According to IFEBP’s study, 66 percent of employees are struggling and stressed by credit cards and other sources of debt. That’s why a lot of employees can benefit from debt consolidation resources.
Offer financial consultation services to help employees manage how they spend their money and how to appropriately consolidate debt. Services like this, financial literacy education, and coaching sessions are easy to coordinate through an EAP. Employees can login and set a schedule that works for them. The more they learn about improving their financial well-being, the more productive they can be at work. And that ends up saving the company money over the course of time.
When you combine online resources and courses with other financial education services, like workshops and coaches, you’re getting your employees off on the right foot. Not only that, you’re also investing in helping your employees live a healthier, happier life.
How will you help employees improve their financial well-being in 2017?
Brad Delmore is a Business Development Manager at LifeWorks, an EAP that takes a holistic approach to employee assistance and well-being with a robust offering of perks, recognition, and rewards, as well as a communication platform. Follow LifeWorks on Twitter, Facebook, and LinkedIn.