Employees’ Financial Health Is An HR Issue

How to equip your employees to deal with their financial worries

Most people don’t go to sleep at night dreaming about talking to a financial expert. They do, however, have nightmares about money burdens and dream about what having more cash on hand might mean for their families and their future. During the COVID pandemic, 43% of U.S. adults report that they or someone in their household has lost a job; with unemployment at a record high, a new world of work from home, and societal unrest, the most pressing issue that HR departments can address is the financial care of their employees. 
 

In this environment, people wonder who they can trust. The financial services industry is littered with institutions and products that take advantage of the American consumer rather than work for American families. Overdraft fees, late fees, hidden fees, excessive interest payments, over-insuring, and opening bank unnecessary accounts are just a few examples of misaligned incentives. As an employer, you have the opportunity to equip your employees with resources to help them find freedom from their money worries. Not only will they feel listened to and heard, but you will build trust, job satisfaction, and even on-the-job productivity.

Better Benefits Mean Happier Employee

Running a company isn’t easy; it can even be messy. Working for a company can be messy too, but the simple fact is that most people want to get to work, to do their jobs well, and to enjoy the fruit of their labor. When money concerns stand in the way, everyone hurts.

Take, as an analogy, the shifts in acceptance of mental health care benefits offered by employers. Even with employee assistance programs offering free mental health visits, employees are often hesitant to take advantage of this benefit. But recent cultural shifts are making mental health care more normalized, and mental health benefits are easier to use than ever before. As an example: in April of this year, Starbucks began providing all of its US partners and eligible families access to 20 sessions with a mental health therapist as part of their employee package. According to a story posted on Starbucks’ website, Ron Crawford, VP of Global Benefits, said: “We listened to our partners in order to understand what they really need and would really use.” 

Employers are starting to recognize that one of the biggest contributors to personal stress, and one of the biggest impediments to workplace productivity, is worrying about money. 

A 2019 study by World at Work, a leading global nonprofit for HR professionals, found that a cash-strapped employee is 3.4 times more likely to experience anxiety or panic attacks and is four times more likely to suffer from depression. They are also 5.8 times more likely to miss deadlines and 4.9 times more likely to produce lower quality work. After all, 72% of stress is driven by money. 

More Employers Are Taking Note, but Most Products Fall Short

If our workforce isn’t able to produce its best work, how can we expect the enterprise to deliver optimal shareholder value? With the onset of the COVID pandemic, unemployment is higher, times are tougher, and belts are tighter than ever before. Financially struggling employees lose 41% more work time to absence than peers without financial worries. When employees are distracted by money matters, their work suffers and so does the company’s bottom line. However, when employers offer financial care services as a benefit, employees know that the company cares not only about their lives at work but also about their well-being and their families.

True financial care goes deeper than financial coaching. A coaching service might help in a triage situation but does not lead people to sustainable change in their spending, debt, and savings habits. Similarly, financial wellness point solutions aren’t scalable; by their nature, they are like hammers solving isolated problems, And they often offer only solutions that benefit their own bottom line or generate more fees.  

Personalized Advice and Practical Tools 

Financial anxiety is intertwined with employee quality of life — and HR Departments are uniquely positioned to help, by offering the right kind of benefits. For HR leaders who are evaluating financial care benefits, remember that the goal is to lead people from a place of stress, to taking control of their financial challenges, and to create a pathway to financial relief. The result of working toward that goal is not only improved quality of life for employees, but employee retention — in a recent study conducted by us here at Brightside, employees using financial care turned over at a rate 47% lower than their counterparts who did not access financial care.

Whatever financial care benefit package you choose, for a sustainable and truly engaging program, it must be empathetic, comprehensive, and supported by expert insights. Emotional due diligence is critical, as is a financial care provider’s ability to offer real-world solutions that are clear and implementable: real solutions centered on holistic care and including not only an employee’s financial challenges, but the greater context of their life, family, and goals. 

One option that is gaining traction is to offer employees access to a financial assistant who is available to any employee, to talk about anything from how to pay for a car repair, to how to lower interest rates on loans and credit cards, to short-term low-interest loans offered without a credit check. By covering the cost for employees to engage with a financial assistant as part of a benefits package, the same way they would speak with a healthcare or mental health professional, the employer is sending a clear message: we value you and care about your well-being. For the employee, this has the potential to be life-changing, and also gives them the tools they need to solve their financial stress. With the freedom and confidence of being financially healthy, employees can then focus on their work. 

Quality of Life for Employees Leads to Quality Work

Keeping morale high and maintaining business productivity always has its challenges, and during a pandemic, this is even more true. But by listening to what employees truly need, employers can grow, quietly yet powerfully, because they enable their employees to thrive. 

Callum King is President and Co-founder of Brightside. Prior to founding Brightside, King was a Principal at Comcast Ventures, where he was responsible for financial technology and enterprise investments.  Connect Callum King Follow @kingcallum