Financial stress at work Shawn Gilfedder, president and chief executive officer of East Windsor, N.J.-based McGraw-Hill Federal Credit Union -- the financial institution that sponsored the Society for Human Resource Management study -- says that employers shouldn't be surprised when their workers let financial fears drag down their on-the-job performance. It's not easy for workers to concentrate on invoices and spreadsheets when they're worried about paying their rent.
"Financial worries don't go away just because someone's at work," Gilfedder says.How serious is this issue? According to the Financial Wellness in the Workplace study, 41 percent of human resource executives said that at least some employees at their firms were struggling with work tasks because they were worried about an overall lack of funds to cover their personal expenses. Nearly 25 percent of respondents said that employees at their companies were experiencing more financial challenges now than they were 12 months ago. In a result that doesn't bode well for retirement planning, 60 percent of human resource executives said that employees at their companies were more likely to request a loan from their retirement savings today than they were in previous years.
Approaches for employers What can employers do to ease some of this financial stress? Gilfedder says that employers can attack the problem by offering financial education programs to their employees. Many employers already offer health seminars designed to help employees quit smoking or lose weight. They should consider boosting the financial knowledge of their employees as a health matter too, Gilfedder says. "Many employees are struggling just to cover their daily expenses," Gilfedder says. "They are dealing with increases in the cost of living. They might be working in areas where the cost to have children in daycare is equivalent to a mortgage payment. These issues place real stress on people, and it can negatively impact their health." Financial wellness programs should include workshops on budgeting, reducing expenses, managing credit card debt and maintaining healthy debt-to-income ratios, Gilfedder says. They should also be targeted to specific groups of employees. Millennials are probably more interested in budgeting, saving and paying off student-loan debts. Baby boomers and members of Generation X might worry more about determining how much money they need for retirement. Employers, then, should offer workshops or seminars geared to employees of all ages. Merely holding retirement-planning seminars isn't effective when many workers are just out of college, Gilfedder says.
Tony D'Amico with the Fidato Group, a wealth management company in Strongsville, Ohio, says that employees have to avoid financial education that steers their workers toward a particular financial product or provider. He adds that employers need to offer their financial wellness programs at a time that is convenient for employees. Attendance at these events will be higher if they are held in the middle of the work day. They'll be lower if employers hold them after hours, D'Amico says.