June is Employee Wellbeing Month– a month created 11 years ago by Virgin Pulse to spotlight the role of the workplace in creating healthy employees. A healthy workplace culture includes appreciating the whole employee; their contribution while they are at work and the life they live outside of your company walls.
Often that life includes financial stress and strain. Because the economy is good these days, many employers may believe their employees are doing well financially. The truth is many employees are living paycheck-to-paycheck. A 2018 GOBankRates survey showed that 58% of Americans don’t even have $1,000 in savings, making it hard for them to cover household emergencies, let alone retirement. Furthermore, those who have put away something for retirement in company-managed 401ks frequently borrow from them to replace the broken refrigerator or another one of life’s many surprises.
The associated stress of the paycheck-to-paycheck cycle is taking its toll on employee health and work performance. Numerous studies show that financial stress drives health-related costs higher (think higher rates of heart attacks, ulcers, migraines and depression). Sick employees miss work more frequently, which also hurts productivity.
The questions employers must ask
Are we aware and engaged enough with our workforce to understand the decisions they face when it comes to their personal finances? Are we willing to be empathetic to the struggles and help provide the desperately needed solutions that they may not be willing to bring to our attention?
Employee financial wellness has often been compared to physical wellness. Employers have institutionalized solutions to ensure their employees are “healthy” enough to be productive at work. However, physical ailments are very recognizable, and people gravitate toward helping those in need.
A better comparison would be to mental health...a condition that isn't recognizable and is much harder to understand and talk about. Thankfully, the dialogue around mental health has increased in the last couple of years, and services and programs to help those in need have grown substantially.
We need to start talking about financial wellness in the same way. People who are struggling in debt fear ridicule and stigma. Its impact can be debilitating, ruining self-esteem, relationships and careers. Hopefully, more businesses will invest in providing solutions and infrastructure to create permanent change.
What employers can do
Financial education benefits are a great start to help employees with budgeting and debt reduction needs, but employers must play a more active role in relieving this financial stress. There are voluntary benefit solutions that offer better terms and more financial flexibility than the alternatives that cash-strapped workers have access to in the marketplace. Among these are:
- Low interest installment loans and credit
- Student loan repayment benefit programs
- Automated savings programs that encourage employees to save money each month from their paycheck
- Bill payment programs that empower employees with debt paydown strategies and the ability to make recurring bill payments on-time each month through payroll deduction
- Employee purchase programs that allow workers to purchase consumer products and services through payroll deduction when they are unable or prefer not to use cash or credit
Benefits that help employees gain control of their financial life are becoming a must-have, and we cannot continue letting this silent epidemic pervade the workplace. Breaking the paycheck-to-paycheck cycle is within reach when employers help employees see the way through offering an array of voluntary benefits.
