How employee financial wellness increases productivity, growth, and creates a thriving workplace.
Over the past year and a half, the COVID-19 pandemic has had devastating impacts across the globe. Many people in the United States, especially hourly, part-time, lower-income, and gig workers, were immediately faced with concerns about their financial security and wellbeing.
But the pandemic only exacerbated the silent struggles many were facing long before. Prior to March 2020, almost a quarter of workers in the U.S. had no paid sick leave, including 42 percent of service-sector workers, 57 percent of part-time workers, and nearly 70 percent of the lowest-income earners. 47 percent of workers were living paycheck to paycheck, according to the National Endowment for Financial Education. 40 percent of adults could not cover a $400 emergency without borrowing or selling something.
We know that the stress from financial instability has a direct connection to our physical and mental health. People who struggle financially tend to have higher levels of anxiety and depression. Money remains a leading factor in attempted suicides and relationship conflict. A 2018 research study in the Journal of Financial Counseling and Planning examined the association of financial status and body mass index (BMI) and found a strong link between poor financial status and high BMI.
It is clear that the health of your employees directly impacts your company. A lack of productivity, focus, engagement, and retention are all significant costs to a company’s bottom line and culture. In a recent study by Bank of America, the number of employees who rate their financial wellness as good or excellent has rapidly declined over the last four years. The vast majority also reported feeling embarrassed to ask for help or uncertain of where to turn.
Financial wellness programs in the workplace are not new but often focus more narrowly on topics like 401k and retirement planning. In fact, financial wellness covers the overall financial health of an individual, supporting both short- and long-term needs. Many employees, especially young professionals, need support with more foundational money matters, like budgeting, managing debt, or using credit wisely. They need guidance from professionals who understand the complexities of financial decisions in their unique situations and can help guide them through with empathy and without one-size-fits-all approaches. Money touches every part of our lives, and it can often feel personal and emotional, so it is important that we provide tailored support for people to feel confident and empowered.
Thankfully, there are several ways you can support your employees’ financial health:
We know people were struggling financially long before Covid-19. But the pandemic has provided a timely opportunity for us to reflect on our priorities and values and begin taking more intentional steps to build healthy habits and positive work environments for maximum growth and impact.
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