America has a financial crisis that extends far beyond Washington D.C. According to a recent white paper issued by Purchasing Power, 44% of full-time employees worry about their personal finances during work hours. In addition, 29% of full-time workers said they spend time dealing with their personal finances during work hours, and of those, 46% spend an average of 2-3 hours per week at work dealing with their financial issues. While this is certainly a costly productivity and engagement issue for employers, it is also a health issue.
Over the past decade, numerous studies and surveys have documented the connection between financial stress and illness. High stress levels due to debt have been linked to:
- ulcers and digestive tract problems
- migraine headaches
- severe anxiety and depression
- increased risk for heart attack
- problems sleeping
- lack of concentration
Money related stress is so commonplace that 69% of those surveyed in the American Psychological Association’s annual Stress in America survey cited personal finances as the number one source of stress. Add to that, the recent findings of the 2013 Retirement Confidence Survey, which indicates that 55% of workers and 39% of retirees report having a problem with their level of debt, and only half (50% of workers and 52% of retirees) say they could definitely come up with $2,000 if an unexpected need arose within the next month. A survey released by Bankrate.com seems to confirm this, with roughly three-quarters of Americans indicating they are living paycheck-to-paycheck, with little to no emergency savings.
American workers also indicated a lack of confidence about their ability to pay for basic expenses (16% up from 12% in 2011), medical expenses (29% up from 24% in 2012), and long-term care expenses (39%, up from 34% in 2012). And only 23% of workers report they have obtained investment advice from a professional financial advisor who was paid through fees or commissions. Add to that, only 14% of Americans correctly answered all five questions in a survey of financial literacy that was released in May this year. American workers are in need of financial advice and the workplace seems to be a safe, effective place for them to get it.
To address employees’ financial well-being, employers are beginning to incorporate financial health into their overall health management strategies. Many have begun offering financial education and financial wellness programs at work in an attempt to help employees change money behaviors and increase financial literacy. This may include seminars to address money management and financial planning, providing free access to non-commissioned financial planners, and EAP programs that include financial counseling.
In addition to auto enrollment into company sponsored 401k plans, some employers are automatically increasing employee contributions to these plans each year in an attempt to help them save more for retirement. Other employers see financial well-being as a critical component to their overall health management strategies and have begun offering 401k contributions as incentives for participating in wellness programs. Regardless of the tactic, the need to address financial wellness is more important now than ever.
What are you doing to make sure your employees are fiscally fit?