Financial wellness programs are not nearly as commonplace as retirement plans or group life insurance coverage within the workplace, but recent research reveals why employers may want to consider adding financial literacy as a priority within the workplace. When employees lack an understanding of their financial circumstances or how to effectively manage changes in their financial lives, employers suffer the consequences. Let’s take a look at the three reasons financial wellness is desperately needed in the workplace.
Finances are a Major Stressor
According to research findings by PwC, fewer employees are finding it difficult to meet their financial obligations each month, down from an alarming 49% in 2012 to 33% in the most recent study (2015). Unfortunately, concerns remain constant in terms of general financial wellness. The PwC study reveals that 45% of the surveyed working adults in the U.S. feel as though dealing with their finances is a stressful endeavor. Adding fuel to the fire is a report conducted by the American Psychological Association (APA) which found that 72% of adults feel stressed about money at least a portion of the time, while 22% experience extreme financial stress.
The most common concern that continues to plague employees’ financial wellness is the lack of emergency savings set aside for unexpected expenses – a foundational aspect of being financially stable. Similarly, survey respondents cite not being able to retire at a certain age, not being able to keep up with debts, and being laid off from work as other major concerns. Each of these pressing concerns add to financial stress on the job, especially when there is no financial wellness program in place to lend a hand.
Financial Management Takes Time
In addition to adding to the stress load of employees, managing one’s finances is often a time-consuming process. The PwC survey states that 37% of respondents say they spend three or more hours at work thinking about their financial situation, each and every week. Among the human resource professionals surveyed, 37% indicated that a financial emergency was the cause of employees missing work.
When employees take time away from work to manage their personal finances, employers ultimately bear the burden. Efficiency suffers, assignments go unfinished or delayed, and overall employee morale is lacking. In fact, a study published by Rand uncovered that financial concerns, along with lack of sleep and caring for family members, had a direct negative impact on employee productivity. Taking time away from work or thinking about financial concerns while on the clock has serious implications for employers that are not easily overcome without a program in place.
Employees Want Financial Literacy
Despite the clear need for employer-sponsored financial wellness programs, most organizations are falling short. Nearly 81% of HR professionals state that retirement planning is provided to employees, but a majority admit that there is no additional financial literacy initiative available, such as credit score monitoring or personal finance training. Even more pressing is the fact that according to a 2015 survey conducted by Harris Poll, 86% of employees think it is important for employers to offer financial wellness programs.
It is clear to see that employees have a strong desire to be more financially literate, and employers have an opportunity to provide a medium to facilitate increasing financial wellness. Both employees and employers benefit from a more financially stable workforce, as stress is reduced, productivity and time on the job is increased, and meaningful benefits that employees truly want are provided.