Can Financial Education Improve Productivity?

Many studies have shown a link between increased levels of stress and increased incidence of certain diseases and health problems. [/caption]If you’re considering wellness programs to improve employee health and productivity, don’t overlook the importance of financial health!

According to an American Psychological Association (APA) poll released recently, the majority of Americans feel financial stress. Among people surveyed in August 2014, 72 percent said they had felt some financial stress during the past month. Twenty-two percent of respondents rated their level of financial stress as extreme, or rated 8, 9 or 10 on a 10-point scale.

Why should employers care? The APA reports that, “Stress about money and finances appears to have a significant impact on many Americans’ lives.” Many studies have shown a link between increased levels of stress and increased incidence of certain diseases and health problems.

Financial stress can also have a more direct link to your employees’ productivity. As the APA said, “Some [employees] are putting their health care needs on hold because of financial concerns. Nearly 1 in 5 Americans say that they have either considered skipping (9 percent) or skipped (12 percent) going to the doctor when they needed health care because of financial concerns. Stress about money also impacts relationships: Almost a third of adults with partners (31 percent) report that money is a major source of conflict in their relationship.”

How can you help your employees achieve financial wellness? The Consumer Finance Protection Bureau defines the four elements of financial well-being as:

People can experience financial wellness—or lack thereof—regardless of their income. If your employees are experiencing significant financial stress, a program of education can help.

Financial practitioners can help employees achieve financial wellness by identifying situations when employees need financial information. They can also help employees explore how to get trustworthy information.

Components of a financial wellness program could include:

 

1          Teaching people to live within their means.

• This means practicing contentment and cutting mindless spending.
• Staying out of debt and using credit sensibly when needed.
• Acting like an entrepreneur in generating income and avoiding interruptions in paid work.

2          Focus on the future.

• Help employees identify specific, realistic goals.
• Assist them to make step-by-step plans to reach financial goals.
• Help individuals feel confident to make a difference in their own lives.

3          Set employees up for success.

• Help employees determine the steps they need to put decisions into action.
• Determine how to motivate them to take action.
• Encourage employees to take advantage of existing ways—from auto-pay to peer support—to simplify staying on track.

 

Employers interested in providing financial education for their employees have several options. Some wellness programs can refer your employees to financial planners or consultants who specialize in helping individuals and families get out of debt. Other employers opt to offer a comprehensive online education counseling and education program. And some voluntary benefits providers offer voluntary financial wellness programs. These can include services such as financial education, incentives for saving money and reducing debt, free credit reports and alternative credit reporting. For more information, please contact us.