These days, the role of a broker involves more than just recommending the right insurance products for a business. Employers value brokers who function as consultants, helping them meet their company’s HR objectives.

 Among those HR objectives are boasting a competitive benefit package to attract and retain top talent; meeting the needs of a diverse work force; and keeping employees happy, healthy and productive.

So, brokers obviously propose core benefits and then round out the package with voluntary offerings. Both traditional and non-traditional voluntary benefits help employers meet the diverse needs of their work force by letting the employees choose what’s most important to them. One of those non-traditional voluntary benefits – employee purchase programs – is also helping employers with another HR goal – keeping employees productive.

Employee productivity is a challenge for employers. In the annual Human Resource Executive survey, “What’s Keeping HR Leaders Up at Night,” human resource professionals reported again this year that their biggest concern is ensuring employees remain engaged and productive. 

Financial stress and productivity

One of the factors affecting employees’ productivity is financial stress.  Although the economy has improved over the past few years, many employees remain burdened by day-to-day financial concerns. 

Consequently, the distractions and resulting levels of stress seriously affect their health and productivity. With an increasing number of people worrying about their personal finances, employers are seeing this trend negatively impacting the bottom line. 

Inevitably, financially distressed employees spend time at work dealing with their personal financial issues.  Further, according to the 2011 Financial Stress Research report from Financial Finesse, an estimated 60 percent of illness is directly or indirectly caused by financial stress, costing most large and medium-sized companies millions of dollars per year in health care expenses.

There is a significant cost to businesses when employees are stressed financially. And there is tremendous benefit to the employer who takes a proactive stance by helping employees learn to manage their finances. Helping employees deal with their finances can help companies cut health care costs, boost productivity, reduce absenteeism and build employee engagement.

Companies can take steps to alleviate employees’ financial distress. Employers should introduce or increase financial education benefits and offer non-traditional voluntary benefits such as employee purchase programs. Employee purchase programs allow employees to acquire high-ticket products and services on a disciplined budgeting plan.

Financial stress is unhealthy

Financial stress can cause illness and unhealthy behaviors, resulting in more healthcare visits, claims and overall higher healthcare costs for both the employer and the employee. It is a leading cause of illnesses such as migraines, back pain, anxiety, depression, insomnia, ulcers, weight gain and heart attack.

A poll of AOL employees shows the toll that owing money takes on people – even on different parts of the body. Stomach ulcers occurred in 27 percent of people with high levels of financial stress as opposed to 8 percent with low levels. Migraine and other types of headaches occurred in 44 percent of people with high financial stress levels compared to 15 percent with low levels. Severe anxiety affected 29 percent of those with high stress levels versus 4 percent of those with low levels.

The American Psychological Association recognizes financial stress as the leading cause of unhealthy behaviors like smoking, weight gain, and alcohol and drug abuse. Other behaviors linked to financial stress are gambling and overextending credit balances. Each time employees turn to these temporary stress relievers, the APA concludes that the stress returns and often at even greater intensity.

The message is clear: Reduce financial stress and the cost of health care for that employee is reduced.

Employee purchase programs as a solution

Employees want their employers to help. In fact, according to the 2012 MetLife 10th Annual Study of Employee Benefits, 49 percent of employees say that because of the economy, they are counting on their employer’s benefits programs to help with their financial needs.

 Offering employee purchase programs as a voluntary benefit can help employees ease fiscal stress and aid them in getting back on a firmer financial footing. 

 Through employee purchase programs, workers can acquire a variety of household items including computers, appliances and furniture through payroll deduction. The best employee purchase programs are viable, cost-effective alternatives to other consumer purchase plans, such as employer discounts, layaway, rent-to-own and even credit cards, which often come with high interest rates or tight access to credit. With employee purchase programs, workers can buy products they need in a disciplined manner using a 12-month payment plan through automatic payroll deductions with no late fees or ballooning interest, making budgeting easy. Employee purchase programs give employees access to items they need when cash and credit aren’t available, thus helping to reduce financial stress.

 Bill Cheeks, personal finance expert and ABBA Associates president, recommends employee purchase programs as an advantageous way for employees to obtain needed household items in a disciplined buying manner when cash is not an option.  According to Cheeks, an employee purchase program as a voluntary benefit provides a way for hardworking employees to buy merchandise they need through an employee benefit at their place of employment. It gives employees access to name brand products with a disciplined way to pay through payroll deduction with no hidden fees like credit cards.

 Some businesses are hesitant to initiate employee purchase programs, believing that such programs may not be needed or valued by workers in their organization. But a nationwide study of who is using employee purchase programs sheds light on who those workers are and it may be surprising to some employers. According to a Harris Interactive and Purchasing Power study earlier this year, the typical employee who uses an employee purchase program is:

• 35-44 years old;
• Married;
• Female;
• Mid-income; and
• Has at least one child in the household.

When employers choose an employee purchase program to add to their benefits package, selecting one with a comprehensive product and services offering will best benefit their employees. The leading employee purchase programs today offer computers, appliances, electronics, furniture, home and outdoor products, fitness and recreation items, baby gear and even educational services. With a wide variety of product offerings, employees can truly personalize their benefits by acquiring items that meet their individual needs: a new washing machine to replace a broken one; a laptop for a son or daughter going off to college; nursery furniture for the new addition to the family. 

 The more innovative employee purchase programs now are offering a way to pay for education at competitive pricing without building debt so employees and/or their children can graduate debt-free. Among the educational opportunities now available through employee purchase programs are tutoring, test preparation, continuing education courses and online degree programs. Tuition reimbursement programs historically offered by employers have decreased and are less funded, yet employers are highly supportive of education for both the employee and their family. With educational programs and professional courses available through an employee purchase program, employers are able to provide educational benefits for their workforce, and employees have the opportunity to graduate debt-free.

Boosting employees’ financial health pays off

Employers can play a key role in helping employees handle financial stress and get back on firmer financial footing. In addition to traditional methods of financial education, many employers are providing financial counseling for employees. Offering a comprehensive employee purchase program with automatic payroll deductions and short-term payback compliments this service because budgeting becomes easier, reducing stress on employees. Companies providing these types of financial health offerings are seeing the results – lower healthcare costs, a boost in productivity and consequently an improved bottom line.

 Companies who have instituted employee purchase programs are not only helping their workforce acquire much-needed items but are experiencing more productive employees. According to the 2012 Harris Interactive and Purchasing Power survey, workers cite the following as the top-three most important benefits they get from their employee purchase programs:

• 57 percent can access products they otherwise could not afford;
• 51 percent can implement a more disciplined budget; and
• 46 percent can be more productive at work.   

Employers who invest in educating their employees in personal finance will see a significant return on their investment. The Personal Finance Employee Education Foundation reports the ROI is at least 3 to 1. Thus, investing $250 in an employee’s financial education yields a $750 return. 

 For many companies, employee financial wellness is the missing piece to maximizing the effectiveness of existing wellness programs and containing healthcare costs. It also fosters a workforce of healthier, happier and more productive employees who are engaged and empowered.

 It is in an employer’s best interest to provide programs and services to help employees remain financially healthy. It means doing more than just providing a paycheck and core benefits. 

 Brokers who introduce employee purchase programs as a non-traditional voluntary benefit to their clients are helping those employers meet HR objectives and increasing their commissions at the same time.