Particularly since the Great Recession, financial distress is widespread among the American workforce, according to research. This distress, not surprisingly, can have a significant negative impact on employees’ work. A new report by the Consumer Financial Protection Bureau called "Financial Wellness at Work" shows some steps employers can take to promote financial wellness in the workplace and increase worker productivity.
“Financial wellness at work is increasingly important both to employers and to employees,” said Richard Cordray, CFPB director. “A financially capable workforce is a more satisfied and engaged workforce that is also more productive. Today’s report showcases some examples of how employers are helping consumers develop the skills they need to navigate a complicated financial marketplace.”
The bureau gathered the research from studies on financial wellness programs and on the delivery of financial education in the workplace. It also engaged with executives in the private sector, nonprofit leaders and financial education practitioners to solicit feedback. The new report found many businesses believe financial wellness programs generate greater engagement, loyalty and productivity.
Holding an orientation for new workers was one of the practices the bureau found most helpful to employees. The report found when employees are new to a company, they are generally more open to change, and therefore it can be a good time to set new financial wellness priorities. Since new employees are focused on making decisions about tax withholding, retirement savings and employer-offered health insurance, orientation programs that include financial education workshops and individual financial coaching can be beneficial.
The report also suggests getting co-workers to help each other with developing better financial habits. Work teams that go through financial wellness training together can create more a collaborative environment, and that encouragement and peer support may help individuals develop sound financial habits.
“Many Americans find money to be an endless source of stress,” the bureau’s report reads. “Too many workers are one car repair away from losing their ability to get to work and earn a living. Even a basic emergency can throw a family into a spiral of debt.
Despite the fact that many employers provide retirement and health benefits for employees, the financial wellness and literacy addition is in demand.
The report also stressed listening to employees and creating a trust network in an effort to know what workers really want to know about finances and savings. Also, tapping technology can help teach employees about financial issues. Employers taking part in the report recommend financial games and mobile tools that can help deliver financial training. These tools especially can be effective if teaching a larger number of employees.
Lastly, tapping into public-private partnerships can deliver a successful and ongoing financial wellness program for little expense, the report says. Local foundations, government agencies, civic organizations and business groups can use each other to offer programs on managing money.
“Forward-looking employers are already playing an important role in shaping a better future for their employees and our country," Cordray said. “We intend this report to spark important discussions about how we can help American workers improve their financial security by developing the financial skills they need to build a better life for themselves and their families.”
—Written by Chris Metinko for MainStreet