Stress over money takes a physical toll on workers, contributing to health-related costs and decreases in productivity. MetLife’s 2011 Employee Benefits Trends Study found that 68 percent of employees who consider themselves healthy also have control over their finances, compared to 7 percent of employees who are in fair or poor health who have control.
Including financial wellness initiatives, much like health wellness, for employees is proving to be a stress-reducing tactic, reducing illness and absences, in turn reducing costs spent combating these issues.
A special report from Financial Finesse on employee financial stress trends found that money management, or a lack thereof, is the key stress factor.
And while some headway has been made in employees’ financial stress levels in the last two years, most employees continue to be under financial stress, with 86 percent of employees on average reporting they are experiencing some degree of financial stress.
But financial wellness—defined as any workplace program or resource designed to provide employees with information on how to manage their financial resources—is lacking. According to a study by the Personal Finance Employee Education Foundation (PFEEF), a leading authority on employee financial wellness programs, only 28 percent of employers provide basic workplace financial education, including budgeting, debt reduction and credit management.
Employers may be realizing the benefit, however, as Judith Cohart, president of PFEEF, says that more employers are contacting the company for guidance on adding financial wellness programs.
“The value of employee financial education is clear,” said Cohart. “The challenge is to overcome the barriers that prevent employers from providing this benefit to their employees.”
Barriers employers cite are high costs, lost work time due to employees attending programs, competing priorities and a lack of interest from upper management to get involved.
When it comes to financial wellness, one thing employers have to ask themselves are if “they are operating on all cylinders,” says Dr. Ronald Leopold, national medical director and vice president of U.S. Business, MetLife “There is an epidemic of financial illness out there,” he says, and people who are in poor health and are financially stressed have increased morbidity.
Leopold says employees acknowledge the relation between financial illness and productivity, and admit that they are distracted at work or have taken time off work to deal with financial issues.
Receiving financial guidance is one way to alleviate those distractions and reduce absences. A good example is MetLife’s program, Plan Smart. The program is free to clients who meet certain criteria and provides onsite financial sessions for employees and their spouse or partner. In the sessions, they look at a number of factors in their own finances, such as how much they save, how much they spend, what their debts are, as well as guidance about Medicare and Social Security.
Leopold says the unearthing can be “grim”, but people who have gone through the program say they begin saving more and spending less, and feel more empowered. “People have even said they feel like they got a raise,” Leopold says.
Carol Farrow, office manager for branding agency Greteman Group says that after developing a wellness program, which included workout classes, yoga classes, activity challenges as well as nutrition programs, through employee surveys they found employees were interested in financial education.
Many employees participate in Greteman’s SAR/SEP pension plan, Farrow says. “We started scheduling annual onsite meetings so team members could sit down with a financial planner to re-evaluate their investments, make changes, ask questions, etc.” Now Greteman is working to add presenters who can come to employees on various financial topics.
This article originally appeared on the BenefitsPro web site, a Summit Business Media publication. © 2011 BenefitsPro.