You help your employees work through business challenges and take an active interest in their professional growth. So why should you care if your top performer spends $20 on spider rolls for lunch every day?
Financial stress can have a profound impact on your employees’ ability to focus, manage work-related stress and be productive on the job.
According to a recent study, nearly half of American full-time workers say they spend work time worrying about personal finances. Twenty-nine percent said they manage financial issues on the job, and 46 percent admit to doing so up to 2-3 hours per week.
While most wellness programs focus on physical fitness, stress management, preventive care and chronic disease management, they often ignore financial health — a factor that can be the primary cause of stress and distraction.
If you’re ready to help your employees get their financial health in order, follow these seven simple and relatively hands-off steps. (Click here to tweet this list.)
1. Know where you stand
Measure the levels of stress your workforce is under and investigate the causes. Many Fortune 500 companies give employees comprehensive assessments of personal, organizational and financial health.
Make sure to tailor your assessment to the specific needs of your company and your employees. Questions like “I am satisfied with my current financial situation,” “I live paycheck to paycheck,” or “Financial stress is taking a toll on me,” will give you a sense of the pulse of your workforce.
2. Educate, encourage and force choice about 401ks
Saving for retirement with a 401k is one of the most painless paths to financial health. 401ks (or their nonprofit equivalents 403bs) are generally a gentle way to broach financial health with employees. You can teach key financial principles like paycheck discipline, tax-avoidance, tax-deferral and the time-value of money.
Most companies have an annual meeting around enrollment dates that lightly touch on why people should invest early. But after that, it’s up to employees to invest.
Do more. Offer online challenges with short videos. Provide success stories from retiring employees, offer small incentives beyond matches and consider offering or increasing matching amounts.
Research shows that 401k investments increase radically if you force employees to choose whether they want in or out. Don’t make your default “don’t invest.” Instead, set up 401k auto-enrollment and force employees to opt out.
3. Teach people how to invest
Again, most 401k vendors will offer yearly orientations. But a one-hour session with a financial salesperson won’t do much to teach employees about the complex art of investing.
Bring in an independent voice quarterly or bi-monthly who can explain some or all of the following:
- Asset allocation
- Risk mitigation
- How 401ks, mutual funds and exchange-traded funds (ETFs) work
- How to avoid hidden fees
- How to compare investment vehicles
- How to speak the alien language of investing
How many of your employees know what dollar cost averaging is and how it relates to them losing money on their investments? This can be done cost-effectively using webinars or video conferencing.
4. Offer workshops about financial basics
Bring in experts to hold informal, fun workshops in-person or online.
These sessions can walk the fine line between informational and invasive, but if they’re done well by credentialed professionals with transparent financial motives, they can change lives.
Plus, financial literacy is a business skill that employees can apply elsewhere at work.
5. Introduce the IRS
Demystifying taxes helps employees avoid those stressful surprises that steal focus from work. The IRS as an abstract concept is terrifying. Bring in a tax expert to tell people what they should do when they suddenly owe money to take the fear and loathing out of taxes.
HR should make sure to “lawyer up” on some simple disclaimers here, by the way.