When employers consider “wellness,” it’s usually in a context involving health insurance.
The premise is simple: Get employees to eat better, exercise more, quit smoking, etc., and they need less health care. Insurance usage decreases. Rates stabilize (hopefully).
Healthier employees are ideally more productive – a nice side benefit.
However, many of the gains employers have made in forging a healthier, happier workforce through wellness programs are threatened by a new paradigm that, largely unnoticed, has crept into the workplace. Many are realizing that a whole new focus on employees’ well-being – financial wellness – is needed to overcome this creeping drain on productivity.
Simply put, a significant percentage of workers are stressed out over money. When they’re at work, they’re thinking about the next mortgage payment, covering utility bills, or the mysterious sound their car is making. These distractions affect their job performance ... and their employers’ bottom lines.
How bad is it? Famed financial expert Dave Ramsey accumulated some statistics to promote his Smart Dollar financial management program:
70 percent of Americans live paycheck to paycheck
64 percent can’t cover a $1,000 emergency without borrowing money
24 percent of Americans’ paychecks go to consumer debt payments
30 percent of workers have delayed medical treatment in the past year due to cost (hardly a boon for wellness, right?)
21 percent of eligible participants borrow against their 401(k)
A recent white paper from Lockton Retirement Services found that “one in five workers reports feeling high levels of stress, and the top two drivers for this are economic: their jobs and their financial situations.”
The firm surveyed 600 people nationwide across a range of ages and income. Its white paper continued: “We discovered that stress affects not only the people experiencing it, but the organizations employing them, as well.”
Dave Ramsey quantified it: Financial troubles can decrease productivity by as much as 20 hours per month. The Lockton white paper revealed that, of the 20 percent of workers identified as “high stress,” half of them admitted to using work time to review personal financial statements or pay bills.
Some workers just don’t manage money well (a finding of the Lockton white paper). Others might be climbing out of a deep financial hole from the recession. Bad luck might be involved, too.
Clearly, many employees are having trouble making ends meet. It’s an understandably stressful situation … and they’re bringing it to work with them.
Employers who want to proactively confront this reality should consider embracing the new wellness frontier: financial wellness.
My next post will explore the components of a sound financial wellness program. Giving employees not just education, but the tools to take control of their finances, can refocus their attention on what you’ve hired them to do. Don’t let their money worries continue to cost you money!
Latest Updates & Information
The story about the U.S. economy remains positive. Unemployment seems to have reached a trough just below 4% while not leading to horribly negative effects on productivity, and showing mild wage inflation, concentrated in certain areas of the economy.Read full story here
The U.S. economy continues to stay in very healthy territory. Unemployment has stayed below 4% for many months while not showing the feared effect that an undersized labor force would have on productivity, and only showing mild wage inflation.Read full story here