How Employers Can Help Educate Financially Troubled Employees
By Priscilla Kohl | HRTools.com Business Writer
Are some employees having trouble concentrating? Do some workers appear distracted, possibly even going blank right in the middle of conversations? Do others seem jumpy, tense and anxious? Or are you noticing that increasing numbers of employees are calling in sick or late because of physical ailments such as stomach upsets or headaches? Are absenteeism rates higher than usual?
Personal financial worries, added to overall stresses related to this down economy, can certainly take their toll. Employees overwhelmed by money problems, or by fears of the unknown, don’t forget those problems the minute they arrive at work. And when increasing numbers of employees are suffering from personal financial woes, unfortunately, they can negatively impact a business’s productivity levels.
According to a recent survey published on www.watsonwyatt.com titled, “Communicating with Employees During the Current Financial Crisis,” the economic downturn is having a significant impact on a large majority of reporting organizations.
Some reports indicate that a financially stressed employee can waste an average of 20 workday hours per month zoned-out on personal financial problems.
Granted, how people handle stress is relative, as some individuals cope better than others. However, if a majority of employees are anxious, fearful and stressed out over personal financial worries, employers may want to offer a helping hand, as these employees can also become less productive and less engaged.
For instance: If employees spend company time taking calls from bill collectors or worrying about mounting mortgage payment delinquencies, eventually such distractions can have a trickle-down effect—negatively impacting performance and an employer’s bottom line.
Virginia Tech University Professor Emeritus E. Thomas Garman, Ph.D., who directed the University’s National Institute for Personal Finance Employee Education, said that, “One study found that the Department of Defense loses $1 billion annually in direct costs and reduced productivity due to employee stress about money matters.”
Why should employers concern themselves with this issue?
Incidentally, the above figure should doubly concern Americans, both as taxpayers and as business leaders. More and more, business and human resource leaders are encouraging employers to help employees find some peace of mind by (a) stepping up their employee communications; and (b) passing along personal financial planning information and resources. By the way, Garman says that, by his calculations, “…for every dollar employers spend on financial education they gain a return of $3 or more.”
In addition to that, when employees learn more about personal financial matters, at the same time, their employers realize other returns. According to The Case for Financial Education at the Workplace developed by the Federal Reserve Banks, other employer benefits can include the following:
- Reduced absenteeism
- Decreased turnover rates
- Reduced direct employer costs related to wage garnishments, bankruptcies, payroll deductions for child support and alimony and administrative costs for borrowing money against retirement plans.
- Increased employee productivity
- Increased contributions to the company 401(k) plan
- Increased employees’ allegiance to their company
- Reduced incidences of employee theft.
In other words: By investing in employees’ well-being, employers are also investing in their businesses.
Short of putting piggy banks in employee lockers or on desks, what other meaningful options do employers have? Especially given that employees’ personal finances are just that—personal.
Obviously an employer cannot force employees to learn more about handling personal financial matters. On the other hand, employers can take some practical and positive steps toward helping their employees cope during these dire times, at minimal or no cost, and on a voluntary basis.
Here follows a few practical suggestions:
- Have your company’s 401(k) provider give presentations and/or write communication pieces. Remember, too, your virtual learning opportunities.
- Invite financial planning experts to come to employee locations and give seminars or ‘brown-bag’ lunch presentations.
- Ask someone from the local Social Security Administration office to come in and explain how this federal program works. A representative might be willing to make a presentation and then take questions from an employee audience.
- Remind employees of the employee assistance program (EAP) benefits, if you have one. Most programs provide financial counseling or they can make referrals.
- Share information about credit unions or invite a local representative to come by and speak to employees. A valuable resource is The National Credit Union Administration (NCUA), which charters and supervises all the federal credit unions in the U.S. This governmental agency provides all types of consumer assistance and services including local events (workshops, seminars, etc.) and a variety of online tools such as Webcasts and Webinars.
- Provide information about credit counseling programs and counselors. The Federal Trade Commission, an agency of the U.S. government that deals with issues affecting American consumers, has a Web page dedicated to the topic of credit counseling programs. Here you can find a wealth of information ranging from basic definitions; what questions consumers should ask in order to find a reputable credit counseling counselor/company; or what rip-offs to look out for or steer away from.
- Refer employees to community and/or faith-based organizations. Many organizations are staffed and equipped to provide emotional and practical support to those who are severely affected during this economic downturn.
Finally, the U.S. Department of Health and Human Services also provides guidance, resources and assistance. Its Web site, the Substance Abuse & Mental Health Service Administration (SAMHSA), has posted A SAMHSA Guide: Getting Through Tough Economic Times.
As the SAMHSA Guide states, employers and employees alike will be better off if everyone can:
“Work together to help all members of the community build their resiliency and successfully return to healthy and productive lives.”
<p>Employees overwhelmed by money problems, or by fears of the unknown, don’t forget those problems the minute they arrive at work.</p>
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