There is a “SILENT” epidemic that afflicts 30 million workers in the US—a quarter of the American workforce—and is costing businesses $15,000 per year per affected employee. Over 25 years ago, it was reported that an employee’s personal finance problems had a direct negative affect on their employer’s profitability. When first reported in 1979, 10% of working adults reported they routinely experience personal financial difficulties; today that number is up to 25%. Financial “STRESS” is frequently listed as the top source of all stress experienced by employees.
The Problem— “It’s their debt, but it’s your problem!”
Following are five ways your financially stressed employees are costing your business huge losses every month of the year. Unless your workforce is unique, at least 25% of your employees—regardless of their position or salary—are affected.
- Reduced employee Productivity—20 hours per-month/per employee
- Workplace accidents—60-80% of on-the-job accidents are “STRESS” related
- Health and welfare issues—75-90% of all doctor visits are “STRESS” related
- Employee turnover—40% of employee turnover is related to “STRESS”
- HR Department Distractions
The Solution—”What’s good for your employees is good for your business!”
Like other personal problems, you can either treat the symptoms of financial stress or you can treat the cause of financial stress. Treating the symptoms through stress reduction techniques and stress counseling only teaches employees how to deal with stress; it does not prevent the stress from recurring nor eliminate it.
To increase productivity and profits, employers must treat the cause of the stress; employers must take the lead in teaching their employee how to manage their own money and how to reduce their debt levels. As basic as that sounds, over 98% of the workforce has had no education in managing their money. Employer sponsored financial education is fast becoming a “best practice” among industry leaders who want a productive and profitable workforce.
5 Components of an Effective Employee Financial Education Program
- Unbiased Information
- Money Management and Investing Education
- Face-to-Face Presentation with options for “Privacy” and at home workshops
- Teach Easy-to-Use Money Management Tools
- Ongoing Support
Employers who stay ahead of the curve will reap the benefits of more profits through better employee productivity, lower absenteeism, less work time wasted dealing with financial concerns, lower turnover and better employee health. As the financial realm gets more confusing and volatile, it is more imperative than ever to put in place a financial education system that will benefit employees and employer alike.