Ease Employees’ Financial Distress—Boost Your Bottom Line Posted on May 31, 2011

Michelle Hunter, SVP Marketing & Development
Credit Union of Southern California
MHunter@CUSoCal.org | 562.698.8326

Although we’re making strides in our economic recovery, finances remain a top concern for many working Americans. Consider these statistics:

  • Eight out of ten people identify money as a significant source of stress in their life.
    American Psychological Association
  • Distress over financial matters contributes to irritability, anger, fatigue, and sleeplessness for more than 52 percent of Americans.
    USA Today

As financial distress spills into the workplace, employers suffer from employees who are less committed to the organization, less satisfied with their pay, absent more frequently, in poorer health, and spending more time at work dealing with personal finances (Garman, 1997). In a report issued by the Federal Reserve, researchers identified that “the average employee spends 28 hours each month worried about, calculating, or stressed over finances, costing employers $5,000 a year in lost productivity.”

While employers may feel a lack of control over their employees’ finances, in actuality, they are a powerful influence. In fact, the majority of American employees receive financial and health products from their employers, and rely on them for guidance.

Workplace financial education programs have proven quite effective in helping employees make better financial decisions and easing related stress. In return, organizations experience:

  • Reduced absenteeism
  • Increased employee productivity
  • Fewer incidences of employee theft
  • Improved employee health, also contributing to health plan cost savings
  • Lower costs related to wage garnishments
  • Greater employee participation and contributions to company 401(k) plans
  • More loyal employees, resulting in less employee turnover

(Garman, 1997)

Moreover, financially literate workers have greater job satisfaction and are more engaged than those who feel stressed and overwhelmed (Federal Reserve). Simply speaking, workers with financial wellness are largely those who receive high performance ratings, use a minimum of time at work attending to personal matters, and enjoy increasing job productivity.

Yet, only a fraction of employers provide financial education beyond the investment information associated with retirement and 401(k) plans. The Cambridge Human Resource Group states that this lack of financial education for workers is “the most critical unaddressed workplace issue.”

For proactive employers looking to ease employees’ financial stressors, Dr. E. Thomas Garman, the recognized leading authority on the subject, suggests “guiding employees toward organizations and agencies that can provide them with financial help, such as credit unions, non-profit credit and budget counseling services, and reputable providers of information, education and services.”

Offering credit union memberships to employees is a smart, simple and cost-free place to start. Credit unions understand that financially savvy employees are more productive employees and offer partnership opportunities to local organizations both large and small. In addition to providing on-site financial workshops and educational materials, employees may also gain access to better interest rates, lower fees, a full line of products and services, conveniences, and expertise.

For more information on how credit unions can enrich employees’ financial wellness and boost your organization’s bottom-line, visit www.CUSoCal.org.

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