man in cardboard box struggling to paddle away from sharks (Photo: Shutterstock)

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Workers who are struggling financially benefit most from financialeducation and coaching, even without a global pandemic. A new report from Financial Finesse advises employersto focus their financial support on their most financially stressedemployees during the COVID-19 crisis, as the financial educationprovider sees a shift toward lower financial health levels in theworkforce.

Suffering, struggling, stabilizing, sustaining, secure

Financial Finesse divides workers into five levels of financialstability and gives each a financial wellness score range,determined by how they responded to the following:

  • whether they have a handle on their cash flow
  • have an emergency fund to handle unexpected expenses
  • how comfortable they are with their debt level

In addition to the lowest levels of suffering and struggling,the categories range from stabilizing, to sustaining to secure.Those categorized as suffering have a financial wellness score of0-2, those who are struggling have a score of 3-4, and so on up thescale.

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According to the report, most workers fall in the "stabilizing"category at 36%.

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The report looked at using three methods of financial educationand coaching: online, group and individual. It concluded that the"best practice" was a combination of all three. This method workedbest among those employees defined by Financial Finesse as"suffering" or "struggling."

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Segmenting workers into these groups helps employers determinewhere to focus their resources. For example, the report found thatamong those who have participated in the best practices method forfive years improved their financial wellness score among suffering(+2.96 points) or struggling (+2.22 points) workers the most. Thoseworkers who said that their financial stress level is "high oroverwhelming" increased their average score by 2.7 points.

What can employers do?

The report finds that employers can benefit from providingfinancial education and coaching services to employees as itreduces the financial stress and mental well-being of employees.Employers can see a cost savings as employees move toward financialstability in terms of productivity and an improvement in employeemental and physical health.

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Employers should make employees aware that these services areavailable and encourage them to participate, especially during thevery stressful (economic and mental) times of COVID-19.

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Other recommendations in the report:

  • Offer bank at work programs.
  • Offer credit and debit counseling.
  • Make employees aware of any employee assistance programs orfunds the company offers and make the application process easier.Many financially-stressed employees will be reluctant to, or areunsure of how, to seek assistance so making the process easier mayovercome those obstacles.
  • Provide a COVID-19 resource portal with information on benefitsand programs. Include benefits providers as well; many already haveCOVID-19-related resource pages available that highlight thebenefits available to employees that might be of particular helpduring the crisis.
  • Offer specialized messaging and assistance to employees indifferent populations. For example, the needs of those nearingretirement are different than those with young families or who aretaking care of elderly family members.
  • Protect employee investments. Financial Finesse expectsinvestment scams to increase during the pandemic. The report citeda study that showed that 80% of employees in the U.S. trust theiremployers to "do what is right," so make sure any information orguidance on investments is from reliable sources with no conflictsof interest.

Steve Salkin is the Managing editor ofALM's Law Journal Newsletters.

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