Credit card debt? Student loan debt? Cash flow problems? Budgeting issues? We all experience financial troubles; for some, it may be a short-term situation, while for others it can be a lifelong journey to get one's financial house in order. This realization is nothing new, but the reality seems to have taken on extra meaning since the Great Recession. With a slow job recovery, stagnant wages, market volatility, a host of global and domestic issues and overall continuing economic uncertainty, many continue to stress about finances and worry about their overall future.
According to the 2013/2014 "Staying@Work" survey, conducted by Towers Watson and the National Business Group on Health, stress is the number one workforce risk issue, and it is not surprising to know that research indicates that financial stress, specifically, is a leading contributor of such overall stress. Financial stress levels are high among today's workers, and this often leads to a myriad of other issues, including physical stress, workforce distractions and increased absenteeism and presenteeism... all leading to lower organizational productivity. In fact, data from the World Health Organization shows that financial stress in the workplace costs employers $300 billion a year in lost productivity and absenteeism!
According to a study by the American Psychological Association almost three-quarters of Americans experience financial stress at least some of the time, and nearly a quarter of us are experiencing extreme financial stress. But, it is certainly not just a U.S. issue; it is a global one. The recent financial crisis, the decline in defined benefit pension plans, pension plan funding issues, and significant changes in worldwide pensions systems have all left individuals with fewer guarantees for retirement.
According to PlanSponsor.com, it was reported that John Hancock Retirement Plan Services and its annual Financial Stress Study, conducted by Greenwald and Associates, learned that 66% of people say their finances cause stress, and of this group, 61% say the stress manifests itself psychologically or physically; 40% feel anxious, 39% feel overwhelmed, 24% have insomnia, 22% have headaches, and 16% have an upset stomach. The good news is that employers are beginning to recognize this problem and are taking action. Survey results indicate that 76% of employers said they are somewhat or very likely to create a financial wellness program in the next six months.
Well, October is National Work and Family Month, and this might be an opportune time to begin such an initiative. The annual celebration of National Work and Family Month offers a great opportunity for employers to showcase organizational practices, policies, and programs that support employees in their efforts to achieve success both professionally and personally. With the many financial challenges inherent in the shifting of more retirement funding to employees in the face of stagnant wages, longer life spans, increased out-of-pocket health-care costs, and increasing personal debt, financial wellness or well-being programs offer employers an opportunity to assist their employees with learning effective money management skills that they can use to increase their financial security.
Recognizing the negative impact of financial distress on employee health and productivity, many organizations are taking actions to improve the financial wellness of their employees. As employer-sponsored benefits programs shift greater responsibility onto workers, and organizations require individuals to make more decisions around complex issues, such empowerment cannot come without a lot of education. Employers can play an important role in helping their employees feel more financially secure by offering financial well-being educational benefits. Every employer can customize their programs to meet the unique needs of their workforce, their organizational culture, and budgetary resources. Financial wellness should be part of the foundation of any employee well-being program.
An unsteady economy has made financial wellness benefits more important than ever to the financial security of individuals and families. Helping employees to better manage their personal finances is a win-win value proposition for both organizations and their employees. October is National Work & Family Month. Go ahead and pledge your organization's support by helping your employees gain more economic security in their lives, while improving organizational productivity.