Companies have increasingly embraced the idea that there’s a connection between employees’ physical health and work performance. This is largely due to the fact that it’s easy to see how productivity is impacted when an employee is absent due to an illness. But, in recent years, employers have started to see that employees’ work performance isn’t just impacted by their physical health, but by their financial health as well.
Read on to find out how employee financial wellness can impact your bottom line — and what you can do to maximize both.
The Rise of Debt
Debt has become a way of life for many Americans. Today, the average household with credit card debt has a balance totaling $16,425, according to NerdWallet’s “2016 American Household Credit Card Debt Study.” The average total debt per indebted household has risen from $88,063 in 2002 (when NerdWallet first started tracking the data) to $134,642 in 2016. That kind of debt can weigh heavily on the mind of debtors, increasing their feelings of stress.
$16,425 is the average household credit card debt balanceNerdWallet’s “2016 American Household Credit Card Debt Study”
Financial Stress & Workplace Performance
In a 2014 Society for Human Resource Management (SHRM) survey, seven out of 10 HR professionals said that personal financial challenges have an impact on employee performance. Nearly half of those same HR professionals reported that employees’ financial status directly influenced their stress levels and ability to focus on work. To become part of the solution, employers need to look beyond employee health and toward the many aspects of their lives that can influence it, such as their financial wellness. Employees have started to look to their employers for access to information, tools and coaching that can help them regain their financial footing.
7 in 10 HR professionals said that personal financial challenges impact employee performance.2014 SHRM Survey
How Employers Can Help
Fiscal fitness — just like physical fitness — starts by getting in the right mindset. To make improvements to our financial health, we have to first look at our behaviors, habits, and relationship with money. Employers can do their part by offering employees a structured initiative or program. Aduro’s “Budget Basics” program, for example, can help employees learn to make micro changes that can add up to macro lifestyle improvements. We begin the program by helping participants identify the reason “why” they want to become fiscally fit. Maybe they want to make room in their budget for travel or start saving for their child’s college education. That intrinsic motivator can help employees stay committed to their goals, and make strides toward financial wellness.
Employees aren’t the only ones who benefit from financial wellness programs. A study by Towers Watson, a global professional services company, found that a company focus on employee health and financial well-being is directly correlated with increased workforce productivity, competitive edge, and an employer’s ability to attract and retain talent.
The takeaway? Focus on improving employee financial wellness and you might also improve your company’s, too.