Although many employers consider their employees’ finances to be none of their business, this delicate topic actually has the potential to directly affect their businesses.
Employees who are stressed about their financial situation often let their concerns affect their job performance. As a result, productivity — and the company’s bottom line — suffers.
However, there are several ways employers can help their employees with their financial issues without doing anything as drastic as taking a peek at their bank statements.
“Financial education has the potential to change people’s financial behaviors and, consequently, their job productivity,” says Rose Gantner, Ed.D., NCC, senior director of health promotion at UPMC Health Plan.
Smart Business learned more from Dr. Gantner about how employers can eliminate financial distress in the workplace.
What should employers know about the issue of financial education for their employees?
A majority of U.S. employees get most of their financial and health products from their employers and look to their employers for guidance. The average American lacks a basic understanding of money and the principles of fiscal responsibility. Add the current uncertainty of recent economic times and there is a good possibility that employees are more concerned about their financial futures than ever before — and they are bringing those concerns to work.
Research shows that about 15 percent of employees in the U.S. are so stressed about their poor financial behaviors that their job productivity is negatively impacted. Persons dealing with personal financial issues can waste from 12 to 20 hours per week on the matter, according to GuideSpark, a company that specializes in corporate financial education.
How does an employee’s involvement in financial matters affect productivity?
Worry over money can cause inattention at work. The Centre for Financial Social Work has said that ‘money issues are the greatest stressor in people’s lives.’ Studies have shown that employees who are feeling positive about their finances are also the most productive. Not being able to pay the bills can weigh very heavily on an employee and can create work-related problems such as absenteeism and presenteeism. Employees struggling with financial concerns tend to have higher turnover rates, added health care costs, and more exposure to liability and lower productivity than do other employees, according to the Personal Finance Employee Education Foundation (PFEEF).
