Focusing on financial wellness isn’t an ongoing fad. It’s an issue that is here to stay for the foreseeable future and the numbers paint the troubling picture of employees’ financial literacy. 

In fact, lack of money management skills among employees may be a bigger issue than many employers realize. Even more serious is the impact employees’ lack of financial health is having on companies. Employers who accept this reality and then provide financial wellness education and benefits to help employees improve their financial literacy are on their way to having more productive workers as well as an enhanced bottom line. 

The state of employees’ financial health 

Just looking at how employees are handling their finances indicates why they are financially stressed and less productive at work. Many hard-working Americans are struggling with their financial situation. They have trouble meeting monthly expenses, making minimum payments on credit cards, obtaining major purchases they need to make, and saving money for unexpected emergencies. And their financial stress affects their job performance, making it a problem for their employer. 

Look at the statistics. According to a Harris Poll on behalf of Purchasing Power conducted last November among U.S. adults employed full-time and/or spouse is employed full-time:

• 40 percent don’t have at least $2,000 in emergency savings for unexpected expenses, such as car repairs, replacing major appliances or an unexpected health emergencies that may occur; and

• 34 percent have had trouble meeting monthly household expenses, like rent/mortgage, car payments, cable bills and credit card bills. 

One reason why employees could be having financial issues is a lack of financial literacy. According to a survey conducted by Harris Poll in March of this year on behalf of Purchasing Power among U.S. adults employed full-time and/or spouse is employed full-time:

• Two out of five (41 percent) don’t have a planned monthly budget;

• Of those who have a monthly budget, one out of four (26 percent) don’t put anything into savings each month; and

• Nearly one-third (31 percent) say that in the past three years, they have run short on funds and had to use credit cards to pay some of their monthly expenses (such as phone, cable, utilities, etc.). 

The root cause of the financial literacy crisis among today’s employees is somewhat murky. Some believe it’s due to kids not learning about finances in school, while others argue that the lack of financial education starts at home. Solving the situation for future employees — today’s children — is one issue, but dealing with the financial literacy crisis now among the current workforce is something employers should address. 

How it impacts employers

How widespread is the financial epidemic among the workforce? The November Harris Poll revealed that 82 percent of employees working full-time have financial stress. Of those, 39 percent said they have at least a fair amount of stress, while 43 percent reported some stress. 

What should be disconcerting to employers, though, is the amount of time employees are spending at work — on the clock — dealing with their financial situation. Here’s the real eye-opener: A Harris Poll on behalf of Purchasing Power last December showed that 37 percent of full-time employees deal with their finances at work. Moreover, of those who deal with their finances at work, the amount of time they spend at the office doing so is considerable:

• 42 percent spend 1 hour per week;

• 34 percent spend 2-3 hours per week;

• 15 percent spend 3-4 hours per week; and

• 9 percent spend 5 or more hours per week. 

When employees take this time to deal with personal finances at work, their productivity drops, and the employers’ bottom line is negatively affected. 

What employers and brokers can do 

These statistics underscore the need for employers to provide financial wellness education and benefits to help employees improve their financial literacy. Further, employees are looking for these kinds of opportunities from their employers. 

Employers should address the workday impact of their employees’ financial stress by providing them with education and training tools to help them prevent major financial issues, change the course of their financial decisions and improve their financial wellness. 

Accordingly, benefit brokers can help employers take steps toward building a more financially secure workforce through financial wellness benefits. In addition to securing online financial education resources, companies can take advantage of value-added programs and financial wellness platforms offered by their current benefit providers, as well as other non-traditional voluntary benefits, such as financial counseling services and employee purchase programs that address further aspects of financial wellness. 

In addition to providing financial education offerings, employers can offer programs that help employees with their short-term financial needs, including employee purchase programs, discount programs and short-term loans. 

As a result of providing thoughtful financial wellness education through in-house resources and considering non-traditional voluntary benefits that also address the topic, employers not only will take a more active role in improving financial literacy, but will enhance their employee relationship and their bottom line.