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Employee Financial Stress and Productivity
Created by
Aileen MacMillan
Content
Economic pressure felt by employees can trickle into the workplace and affect performance. In August, “The Gallup-Healthways Well-Being Index” showed that more Americans reported they were struggling than were thriving “for the fourth consecutive month.”
Day-to-day, this means that many employees are struggling just to pay the bills. Almost half (47%) of more than 7,192 workers surveyed by CareerBuilder.com reported that “they always or usually live paycheck to paycheck just to make ends meet, up from 43 percent last year.”
How do these pressures trickle into the workplace? High financial stress translates into poor employee health and lower productivity, according to the Personal Finance Employee Education Foundation website.
As a result, some companies consider providing financial education for employees. While some suggest this type of education has little impact, Annamaria Lusardi – an economics professor at Dartmouth College – cites research that shows “retirement seminars are found to have a positive effect mainly in the lower half of the wealth distribution and particularly for those with low education.” In her opinion -- although effectiveness of the education could be improved -- "financial education works.”
Since the Gallup Poll shows that more citizens in low quality jobs report they are struggling than those with higher quality jobs, the argument for financial education is even stronger. Similarly, 2006 research cited by Winham, CEO of the EDSA Group – a financial education company showed "employers can expect $450 in positive job outcomes and $300 in lower health care costs for each employee who improves his or her financial behaviors and financial well-being.”
What are your thoughts about providing employees with financial education during these challenging economic times?
Is your organization considering offering this to employees?
A fairly comprehensive list of resources can be found at: http://www.personalfinancefoundation.org/resources/best-resources.html
References:
Armour, Stephanie. “Money worries hinder job performance.”
USA Today
[www.usatoday.com]. October 4, 2005.
Grynbaum, Michael M. and Peter S. Goodman. “Higher Costs Are Taking a Toll on Business.”
New York Times
, August 19, 2008.
Harter, James and Raksha Arora. “A Low-Quality Job Makes a Tough Economy Tougher.” Gallup [www.gallup.com]. September 3, 2008.
Harter, James, Raksha Arora, and Amy Neftzger. “More Americans Struggling Than Six Months Ago.”
Gallup
[www.gallup.com]. August 14, 2008.
Lusardi, Annamaria. “Financial education: Does it work?” Financial Literacy and Ignorance – Blogspot.com [http://annalusardi.blogspot.com]. February 10, 2008.
“Nearly Half of Workers Living Paycheck to Paycheck, Finds CareerBuilder.com Survey.” CareerBuilder.com [www.careerbuilder.com]. September 3, 2008.
Personal Finance Employee Education Foundation. “Worker Financial Distress” [www.personalfinancefoundation.org]. March 23, 2005.
Windham, Susan S. “Financial Distress for Employees Means Lower Profits for Employers.”
HR Management
[www.hrmreport.com]. Obtained September 8, 2008.
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