Most employers today are aware that the financial well-being of their workforce plays a role in how well the company runs overall. Benefits are expanding to include more financial education and wellness programs, as well voluntary benefits that provide short-term financial assistance when needed.
To really make the most of these options, it’s important to understand the signs of employee financial stress and how it plays out on the job.
Five Signs of Employee Financial Stress
#1 – Withdrawing loans against retirement savings.
One-fourth (27 %) of employees have taken some form of loan, early withdrawal or hardship expense withdrawal from a 401(k). Some of the reasons they have mentioned for withdrawals are unexpected medical expenses; getting behind on household bills; and paying down high credit card balances.
#2 – Asking for payday advances. Employees who need short-term cash have limited options – finance charges on a typical payday loan equate to 400% APR.
#3 – Unexpected absences. A 2017 PwC study found that nearly half of employees who are worried about their financial health miss work occasionally.
#4 – Preventable medical issues. 34 % of working-age Americans didn’t go to the doctor or access other medical services because of cost in 2016.
#5 – Spending time on personal finances at work. That same PwC study showed that financially stressed employees spend at least three hours of work time dealing with personal financial issues.
If any of those signs look familiar, then the effects of financial stress in the workplace probably look familiar as well. One-third (34 %) of U.S. workers believe their current financial concerns are negatively affecting their lives. When they bring this stress with them into work, it affects a company’s bottom line in terms of productivity, higher absenteeism and more healthcare claims.
Employers do have ways to help. Offering a benefits program that provides online financial education tools and resources, as well as on-site money management and financial planning seminars can help employees learn how to better manage their money, change their money behaviors and increase their financial literacy. A voluntary benefit such as an employee purchase program help employees avoid payday loans and cash advances from credit cards when they have emergency needs.