Five Ways to Help Employees Manage Financial Stress During Times of Uncertainty

Financial stress has been a top stressor for employees for quite some time. In fact, nearly 60% of employees cite finances as their primary stressor.[1] Their financial worries surpass other top stressors, and it’s impacting their job performance. With the addition of COVID-19, financial stress is at an all-time high. The COVID-19 crisis is an additional strain on incomes and causing growing uncertainty.  

When employees are worried about whether they or their spouse will be laid off, how they will pay their bills or how they can manage their growing debt, it can have a significant impact on their work. In fact, research conducted before COVID-19 shows financially stressed employees are less productive and more distracted at work. They also have higher rates of absenteeism and presenteeism (at work but not fully functioning). Employees typically spend more than three hours a week dealing with their personal finances at work and they lose nearly a month of productive work time (21-31 days a year) due to financial worries.[2] The recent circumstances likely only exacerbate the situation.  

Employers simply can’t afford to ignore employees’ financial stress. Lost productivity due to financial stress costs American businesses $500 billion annually — around 2.5% of the U.S. gross domestic product (GDP).[3]

The good news is that many employees want help dealing with their financial strain — and they appreciate their employer's help.  

As an employer, you’re in a unique position to positively impact your employees’ lives by helping them reduce their financial stress. Here are five ways you can help:

1. ‍Emphasize financial wellness: Research shows that financial wellness benefits, when properly structured and executed, reduce employee stress, improve retention, boost productivity, and improve a company’s ability to recruit and retain top talent. Nearly three quarters (74%) of employees believe financial wellness is an important benefit, and 60% are more likely to stay with an employer that offers a program to help them manage their money.[4]
   
   Financial wellness programs are designed to help relieve employee stress and anxiety by helping them successfully manage their day-to-day finances, prepare for unexpected expenses and save for the future. To create an effective financial wellness program, you’ll first need to understand individual employee concerns. Anonymous surveys are a good way to gather this information so you can tailor the program to their needs.  
   
   Keep in mind, however, financial wellness is not one-size-fits-all. Every employee situation is unique requiring different solutions and levels of attention.  ‍
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2. Offer access to experts: Financial wellness programs can help boost your employees’ fiscal health and reduce their financial stress over the long term. However, some may have issues that need to be addressed immediately to minimize their financial stress. In fact, 31% of employees want individualized advice about their money concerns.[5] Giving employees the opportunity to virtually meet with one of LoVasco’s advisors can pay dividends when it comes to helping them manage financial stress related to common concerns such as repairing bad credit, budgeting and saving, medical bills and retirement planning.
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3. Encourage employee engagement: Actively engaging employees in your financial wellness program can reduce their money-related stressors. Since improving financial security is based on behavior changes, your financial wellness program should be inspiring. Implementing milestones and quick wins — such as creating a budget or canceling an unused subscription service and allocating the savings toward paying off debt — can help keep employees motivated and accountable. The program should also be easily accessible, which helps remove barriers to success. Consider a financial wellness program with online tools that are available from any computer or mobile device — where employees spend most of their time anyway.
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4. Help employees save more for retirement: Nearly 60% of employees say they’re stressed about saving for retirement.[6] Employers can help mitigate that stress by encouraging employees to take advantage of their retirement plan’s tax benefits and any employer matching contributions. It’s a great way to support lifelong savings behaviors and improve retirement readiness.
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5. Communicate about relief resources.  Be sure to communicate with employees about the other available resources to help address financial stress, such as confidential access to your Employee Assistance Plan (EAP).  If you’ve chosen to implement in your retirement program, consider providing a summary of some of the relief measures offered through the CARES Act. Encourage them to discuss their options with their financial or tax advisor before tapping into their retirement.  

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When thinking of ways to positively impact your employees' financial and mental health, keep these five strategies in mind. Although financial stress is on the rise, you can play an important role by offering benefits that help your employees improve their financial stability and well-being.

Selecting and implementing the right financial wellness program for your employees can be challenging. We can help you design the appropriate program for reducing your employees’ stress and provide them more financial flexibility. Send us an email or give us a call to learn more.