Employee Financial Distress: The Perfect Storm for Employers

Employee Financial Distress

The Perfect Storm for Employers

“The lack of money is the root of all evil.” Mark Twain

Submitted by:  Cherri Smith, CPC, Ulliance, Inc.

From a wellness perspective, financial wellness is one of the most important dimensions and can have an enormous impact on an individual’s health and well-being.  According to Personal Finance Employee Education Foundation (PFEEF), “Financially distressed employees have trouble functioning in their jobs, and this is hurting their physical health as well as taking a bite out of the employer’s bottom line.”

When a person is experiencing financial difficulties often they are in such a state of stress that they experience health issues.  According to survey findings, highly debt stressed employees are:

  • More than 13 times more likely than low to no stress people to lose sleep at night
  • More than seven  times as likely to have severe anxiety
  • Almost seven times as likely to take stress out on others
  • Nearly six times as likely to experience severe depression
  • 4 times as likely to have ulcers or other digestive problems
  • Twice as likely to have heart problems and migraines

All of these things lead to low engagement, low productivity, absenteeism, healthcare claims and presenteeism from dealing with financial issues during work hours. Not only do these symptoms appear on the job but they are evident at home leading to marital distress, social distress and often times a feeling of failure and loss of purpose.  Remember the eight dimensions of wellness including financial, emotional, social, spiritual, occupational, physical, intellectual and environmental? Ignoring and not addressing the financial dimension can really upset the balance!

When a person is in pain it is natural to be laser focused on the pain until it is relieved. In this state, a person cannot see anything else but the pain and all else fades to a lessor priority.  Employers should understand that this lack of focus impacts them to a large degree even though it is the employee’s responsibility.   According to a study by MetLife, employees are looking to their employer to provide financial education.

“Offering financial education in the workplace is an effective way to both drive productivity and demonstrate empathy. Despite the fact that 50% of employers identify financial education to help employees become financially secure as a very important benefits strategy, only 34% currently offer financial education workshops. This could be a missed opportunity: the Study shows that 49% of employees who do not have access to financial education through the workplace would be interested in having this opportunity.”

What can employers do from a financial wellness perspective?

  • Offer a wide range of financial education options.  The source of financial stress can range from living paycheck to paycheck through saving enough for retirement.  This could mean involving organizations like debt consolidation companies and financial planning resources.  There are many companies like MetLife and Greenpath who offer education at no cost to the employee or employer.
  • Partner with a stand-alone Employee Assistance Program (EAP) provider to help with the emotional and behavioral impact of financial stress.  Stand-alone programs not embedded in other benefits, provide stability and familiarity for employees so they know who to call for assistance.  EAP services embedded in Life or Disability plans can change each time the employer decides to change carriers leading to confusion and low utilization.
  • Partner with a wellness provider that offers Behavioral Coaching.  Coaching can address the beliefs, assumptions, emotions and behaviors surrounding money and can bring a level of awareness to the source of the financial distress.  A coach will work with the employee to help change mindset leading to lasting behavior change.  They also help the employee to create plans to be more productive at work while he or she addresses financial issues.
  • Offer wellness incentives for individuals to take advantage of financial education as well as other educational opportunities.  Studies show that more educated a person is the healthier they tend to be. Knowledge is power.

People who are financially stressed often times feel alone and ashamed and don’t know where to turn for help.  Employers have a phenomenal opportunity to provide assistance that will not only improve the lives of their employees but also the company’s bottom line.

I welcome your feedback and any ideas you have for addressing financial wellness!  Stay tuned for the next wellness dimension: Emotional.

In the meantime, live well!!

Cherri Smith, CPC
Ulliance, Inc.

For more information regarding Ulliance EAP and Wellness Programs call 1-248-273-6229