Employers are becoming aware of the potential impact that poor employee financial health can have on their business. It impacts productivity, retention, and employee health -- which in turn affects the company’s bottom line. To address this issue, employers need to offer benefits that take a holistic approach to supporting their employees’ financial wellness.
Employee financial health – it’s a shaky situation
How employees are handling their finances indicates that many of them are in a precarious financial position. In March of this year, a Harris Poll conducted on behalf of Purchasing Power showed that of U.S. adults employed full-time:
41 percent of U.S. adults employed full time don’t have a planned monthly budget
Of those who have a monthly budget, one out of four (26 percent) doesn’t put anything into savings each month
Without a monthly budget, employees most likely aren’t making sound financial decisions. Consequently, they report that they have trouble meeting monthly expenses and making minimum payments on credit cards. They also report not being able to make major necessary purchases, and don’t have money saved for emergencies. All this leads to employee financial stress.
The ripple effect on employers
One of the most concerning side effects of employee financial stress is how it affects employee productivity. In December 2015, a Harris Poll conducted on behalf of Purchasing Power showed that 37 percent of employees deal with their finances at work. Of those, 34 percent spend 2 to 3 hours per week on this. That means they’re spending time on the clock dealing with creditors or balancing their budget – not focusing on their work.
How employers can address the issue
The ever-growing voluntary benefits landscape offers employers a valuable tool for combatting employee financial issues. Some of the available programs include:
Online financial education resources
Non-profit financial counseling services
Value-add resources from their current benefit providers, such as the financial wellness platform that Purchasing Power offers customers
Other programs are available to help employees with their short-term financial needs, including employee purchase programs, discount programs, and short-term loans. Employers who offer these kinds of programs can create a workforce that is financially healthier – which can help boost the bottom line.
To learn more about the current state of employee financial health and how companies can navigate through it, download our full report, “An Employee Crisis: Financial Literacy.”