Money Problems Zap Employee Productivity

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Forty-eight percent of workers are stressed about money according to Salary Finance’s Employers Guide to Financial Wellness. The problem is so severe that 40 percent of workers say that health has been affected by financial stress (PWC Wellness Survey – 2019). 

This money stress zaps employee productivity and retention. Workers with financial stress can take almost twice the days off, cause them to not complete tasks or affect their quality of work. On top of that, workers who are financially stressed are 2.2 times more likely to be looking for a job, according to Salary Finance.

This is not only stressful to the employee, but the employer suffers too. Finding and hiring quality employees is expensive! 

To solve this problem, many employers offer financial incentives like retirement plan matching, health savings accounts, and other means to remain attractive to their employees. Though these programs are helpful, it really doesn’t solve the problem. 

What financial problems do employees face? 

Some might say that being behind in savings or having credit card debt is the problem. But that’s just the symptom. The main cause of stress is the day-to-day expenses, the feeling of living paycheck to paycheck. Forty-nine percent find it difficult to meet household expenses each month, according to the PWC survey, and 34 percent run out of money before payday which is not just isolated to low income workers. Twenty-six percent of employees earning $160,000+ experience the same issue based on the Salary Finance Survey.

Forget about employees contributing to their retirement plan; 27 percent have taken money out of retirement plans prematurely, and 49 percent anticipate they will. 

How can employers improve employee productivity and retention? 

Companies need to think beyond traditional compensation and other financial wellness incentives. Although these programs can make employees wealthier, it doesn’t solve their productivity and retention issues. 

Employers who offer wellness programs can see their employees twice as likely to report being satisfied with their job according to a financial wellness survey by Mercer. 

What programs should employers offer? 

Employers should offer programs that hit home with the issues their employees are facing and help them overcome the financial issues that matter most.

Student Loans: 44 million people have student loan debt totaling $1.6 trillion. Unfortunately, paying back student loans and dealing with loan servicers can be confusing and a huge pain. The best resource I’ve found to help people navigate their student loans is Student Loan Planner. 

This company is dedicated to helping student loan borrowers get the best repayment strategy for their specific situation through speaking, consulting, and free content. 

Budgeting: The most important thing that someone can do to reach their financial goals is spend less than they make, but that is much easier said than done. It’s almost like telling someone who’s out of shape to eat less and exercise more. On its own, that advice is not that helpful. 

Couples with kids often feel financially stretched and they don’t think they can cut anything from their spending so that they can save and pay back debt. It’s hard enough to get along about money, especially if each one has a different mindset around spending and kids are breaking the bank.

Family Budget Expert helps parents find extra money in their budget so they can finally save and pay back debt. This works especially well for couples but also for individuals. Family Budget Expert provides corporate training, professional speaking & workshops, as well as individual consults. 

Companies can improve employee productivity and retention with financial wellness

Employers can dramatically increase productivity, retention, and employee wellness outcomes by providing substantive third-party financial wellness programs. 

There are plenty of wellness programs out there and financial incentives that companies offer that are extremely expensive and provide little benefit to helping their employees. 

An effective financial wellness program needs to go beyond retirement planning and dive into the issues that households are facing on a day-to-day basis. Helping employees find the best strategies to get out of paycheck-to-paycheck living will lead to more loyal, productive employees. 

Beyond that, these incentives will positively impact the lives of those people and their families. Take the time to think about the real issues employees are struggling with today and how you can help them be more productive, fulfilled, and strive to do their best work.

Rob Bertman, CFA, CFP® Founder – Family Budget Expert Professional Speaker, Corporate Trainer, Consultant

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