Your employees are vital to the success of your business. Providing ample training, delivering regular feedback and empowering them to make decisions can all help improve their productivity and contentment, according to Harvard Business Review. However, did you know that your employees’ financial well-being can also impact productivity and your bottom line?
A 2016 study by the International Foundation of Employee Benefit Plans found that 4 in 5 employers find their employees’ personal financial issues have an impact on their job performance. Another 2016 study, this time by Bank of America Merrill Lynch, found that 3 in 5 employees felt stressed about their financial future. Learn how these financial woes impact employee performance and what you as an employer can do about it.
The Harm of Employee Financial Stress
When employees have trouble managing money, controlling their debt, sustaining an emergency fund or saving for retirement, there can be a negative impact on your business. Here's how:
- They can’t focus at work. In a 2015 report from the Society for Human Resource Management, 20 percent of employees admitted that personal finance issues have been a distraction at work.
- They spend time on finances at work. A review of research by the Partnership for Workplace Mental Health found that a majority of employees who were distressed by personal finances spent company time either directly dealing with or worrying about their finances.
- They’re less healthy. Financial stress is correlated with health problems. In a 2014 American Psychological Association (APA) study, 26 percent of adults reported feeling stressed about money most or all of the time. Long-term stress can disrupt your bodily processes and may increase your risk for health problems such as anxiety, depression, heart disease, sleep disorders, weight gain and cognitive impairment. The Mayo Clinic says these problems may lead to lower productivity at work, and for some, they’re never addressed. The APA study reported 12 percent of Americans saying they had skipped going to the doctor at least once due to financial concerns.
How You Can Help
- Offer health savings accounts/flexible spending accounts and contribute funds. With health care costs on the rise, it’s especially helpful for employers to help alleviate these costs when they can. You may be able to help employees improve their health and reduce the financial stress of paying for out-of-pocket medical expenses by offering tax-advantaged savings accounts, such as health savings accounts or flexible spending accounts.
- Implement automatic enrollment and escalation in 401(k) plans. Many employees are concerned about retirement money but might not realize they can enroll in their company’s 401(k), know how much to contribute or simply never get around to enrolling. Automatically enrolling employees in a retirement plan and increasing default contribution rates over time can assist employees with retirement readiness.
- Offer financial wellness programs. Your employees may not fully understand the benefits your workplace offers, which ones they’re eligible for and how they work. Offering voluntary classes, online tools and one-on-one consultations with financial experts, such as those at Navy Federal, are great ways to help employees with their personal finances. It’s becoming increasingly common, with 48 percent of large companies having a financial wellness program in place in 2015, according to a Bank of America Merrill Lynch study. By providing financial tools and education for employees, you help boost productivity. Explore additional financial resources with Navy Federal’s business calculators, retirement insurance coverage and more.