The Stress Monopoly
In a March 2018 story by Shawn M. Carter for CNBC, he cites a study by a startup mobile banking company Varo Money that about 30% of the American population is in a constant state of worry about money. That adds up to over 98 million people. Varo’s assessment of the lack of financial wellness in America presents even more unsettling statistics:
- About 19% (or 1 in 5) live paycheck-to-paycheck
- Over 69% revealed the need to dip into their savings to make it to the next payday at least once in the past two years
- Over half (55%) of the millennial population (approximately 83 million) have used their savings in the past few months
- About a third (31%) of the millennials in the US understand what their finances look like on a month-to-month basis only “somewhat” or “not at all”
So what can be done to help employees extinguish the money-based fears? Employers can aid their staff with financial health and wellness programs.
Health and Financial Wellness Building Blocks
The cost of living keeps rising, and wages are stagnant. Dave Ramsey, a well-known money management expert and popular radio personality, says, quite simply, “In America, broke is normal.” People have little to no savings, retirement money that’s as slight and thin as gossamer and a frighteningly high percentage of people who can’t cover a $1,000 emergency.
First, what is financial wellness? In a nutshell, it’s learning how to successfully manage one’s monetary expenses. It’s about reducing (or eliminating) debt and accumulating savings for everything from emergencies to retirement. It’s also one of the biggest buzzwords in business today, according to Kerry Hannon, a contributing writer to Forbes magazine. One of the biggest concerns American workers have is money shocks – dealing with expenses that aren’t planned for. That affects a person’s ability to work and to work well. Money shocks lead to distracted employees whose productivity – and even health – plummets. And the health issues are exacerbated by the ever-increasing burden placed upon employees to pay for their health care. But…
…there’s good news. There are some very simple steps that can be implemented to bring employees to a financially healthier place.
A Question of Balance
In the best of all possible worlds, an employee is receiving good wages for his/her work, and is tucking away money for retirement, general savings and possible emergencies. It’s all about finding the right balance.
Global consulting leader Mercer suggests that employers can help their employees understand and expand their health and financial wellness. Such a program is almost exactly like a physical wellness program. And the people directing it best are those in the Human Resources department. Why? Because wellness programs do lead to increased productivity and decreased worry and distractions. Both benefit the company, and at the helm of every benefits program is HR.
The Benefits of Benefits
A great number of American companies have taken a more loosely-structured approach to the benefits packages they offer employees. It makes sense to incorporate health and financial wellness programs, as such programs benefit both company and employee. When you’re looking to keep the best, the brightest and the most talented as employees, helping them on the finance front is a win-win situation.
There are a number of ways to accomplish this. In Lauren Dixon’s article How do Financial Wellness Programs Benefit Employees? , she cites Sarah Newcomb, behavioral economist at Morningstar Inc., that an underlying issue for many could be that many programs treat financial wellness as if there’s only math involved. There are many emotional and social factors as well. Money management should be compassionate, nonjudgmental and nonmathematical.
BrightDime CEO David Stedman observed that there should be five key points in a company’s development of a financial wellness program. They are:
- Make sure that the advice is holistic and personalized.
- Ensure that there is continued engagement. Financial wellness actually needs to be a lifestyle in order to have long-term effects. It’s exactly the same as a physical wellness program. If employees aren’t engaged, then the company needs to modify how they market and communicate their offerings.
- Measure and show data on the effects of initiatives and third-party providers.
- Keep the information aggregate. Privacy is important! There should never be information about the individual employees.
- Be sure vendors don’t have hidden agendas, such as wanting to sell other products. This will negatively impact engagement among employees.
While employees might be iffy about the benefits of both physical and financial wellness, HR’s big-picture perspective can see the genuine improvement on both fronts.