Employers are expanding their budgets to help workers with money woes
- Employers are moving to empower workers saddled with long- and short-term money problems with financial education. According to a new survey by the International Foundation of Employee Benefit Plans, employers polled said they're answering the call by offering (63%) or thinking about offering (19%) financial education to help their employees manage money, improve their investment decisions, understand their benefits and curb productivity losses caused by money concerns.
- Study participants named credit card debt and other types of debt as the top financial challenge, according to the study. Employers also said that other money concerns for workers include saving for retirement, paying for their children's education and handling basic living expenses. Survey results showed that these factors are negatively impacting the workplace through stress (79%), lack of focus at work (64%), physical health issues (36%) and absenteeism (34%).
- Nearly a quarter of the employers reported having a financial education budget in 2018, which is substantially higher than the 14% that reported having such budgets in 2016. The survey also showed that 20% of employers are considering adding a financial education budget.
Proactive employers moving to alleviate their workers' finance-borne stress may have been eyeing a growing trend. One in three workers cite money worries as a distraction in a report released by the Center for Financial Services Innovation in June 2017. Financial stress leads to health problems, lower productivity, absenteeism, turnover and higher healthcare expenses — all costly concerns for workers and their employers.
Last November, the Willis Towers Watson reported a decline in employees' financial well-being, following a seven-year upward trend. The results showed a 13% increase over a two year period in the number of workers who said their financial problems were negatively affecting their lives. The tumble is troubling because it follows several years of what looked like an economic recovery for wage earners after the Great Recession.
Employers may want to help workers get their financial problems under control, since they have a stake in making them more savvy about managing money. Financial literacy alone, however, might not suffice in helping employees to clear their financial hurdles. An Aon Hewitt report concluded that employers should also focus on helping workers make behavioral changes in managing and saving money.