Why Financial Wellness Is Important At Work
Own your finances!
Oliver, an intelligent 22-year-old, secured a job at the firm of his dreams. Oliver and I have a lot in common: we attended the same college and graduated from the same department. Because of this, I am more qualified than anyone else to testify to his intelligence.
Considering Oliver’s impressive academic record, everyone expected him to do well at his new job. I, too, felt the same way. However, our expectations didn’t meet reality.
Early on, Oliver impressed his employers with his enormous gifts and skills. But then, as weeks and months went by, Oliver’s productivity waned, eventually hitting rock bottom.
In shock, I approached him during our Alumni meetings. And like a little kid trying to control his tears, he poured his heart out.
Following a long discussion with Oliver, I learned he was in extreme financial distress.
And in an instant, I could connect the dots. Oliver had never had to manage his finances. From his feeding to his upkeep to his allowances to his general check-up, the college took care of it all. He had access to all He needed. Safe to say, He was never independent.
As a result, He didn’t have to worry about anything but his books.
However, upon exposure to the outside world, these outsourced responsibilities suddenly became his own. And he couldn’t quite manage it. In no time, He was at his breaking point.
From experience, we know a few “Olivers.” Intelligent and young individuals who we thought were destined to reach the top. But never did.
A Bank of America survey found that young employees are most likely to experience financial stress.
About 93% of GenZs and Millenials (aged 18 to 44) who took part in the survey said they experienced extreme financial stress. And this is a reason for employers to be proactive. Or else more talented young people will become victims of this terrible phenomenon.
In one research study published by Rand, financial distress, among others, negatively influences productivity in the workplace.
Financial distress can bring so much anxiety and pressure. Hence, employers should assume responsibility as early as possible.
As Pat Milligan, Senior Partner at Mercer points out, 22 percent of employees miss at least one day to handle financial issues. Fifteen percent spend at least 20 hours a month on personal financial matters at work. And a whole 20 percent have had to resign due to financial stress.
Consequently, financial distress increases absenteeism, productivity, output, turnover, and employee disloyalty at work.
Our overall wellness depends on our financial health, among other things. And I expect this to be obvious to everyone. Finances can be overwhelming for anyone, regardless of age or family responsibilities, so it’s not surprising that most people leave their finances to chance.
This is why firms need to address financial wellness. Or else it can damage the collective success and the quality of output in the workplace.
Consider this:
The Journal of Occupational and Environmental Medicine reported that businesses lose $348 in productivity per day for every employee absent. As you can see, employers should be confident about this issue.
Managing Financial-Related Issues In The Workplace
There’s a myth that we can solve financial wellness only by raising employee salaries.
Like Oliver, the paycheck was never the problem. Instead, the problem was financial literacy. Safe to say, financial wellness goes beyond a fat income. And sound financial planning plays a massive role in improved financial health.
As we established above, employers should understand that financial distress reduces workers’ productivity significantly.
It’s now clear how much financial stress affects employees’ productivity at work; here are some ways employers can alleviate its effects:
1. Providing Access To Financial Literacy Training
Only a few employees out there are financially literate. Many people must gain the knowledge and skills to manage their finances effectively.
Hence, employers should schedule regular lectures on budgeting, debts, saving, investments, and insurance for employees.
2. Prioritize Your Employee’s Financial Health Early On
Employers can offer employees low-cost, high-yield financial investments as part of their onboarding packages.
The benefit of this is that it will relieve the financial burden and stress off young, novice employees who have no experience managing their finances.
In addition, when a group invests in something together, it hits differently than when individuals do so.
3. Provide One-on-One Coaching
Statistics have shown that a one-time lecture on financial literacy is far from practical.
But then, if the same message is repeated often, employees will be more likely to recall it, and they will be able to act accordingly. One-On-One Coaching can help emphasize key personal finance concepts among employees.
We can also achieve financial accountability through one-on-one Coaching. Being accountable to someone keeps you committed.
On this note, employers can set up a manager-subordinate meeting to discuss the state of their finances from time to time.
4. Provide Low-Interest Loans To Those in Drastic Financial Need
Employers can show support towards their employees by offering financial assistance. Taking care of your employees when it counts is one of the best ways to show them you care.
As cliché as it may sound, “a friend in need is a friend indeed.”
In that way, you can act as a “friend in need,” relieving your employees of their financial worries instead of leaving them to deal with them on their own.
Employees Have A Role To Play, Too
Although low paychecks and greedy employers are often blamed for financial difficulties, employees also play a part.
Employees must show commitment to turn their situations around. The truth is, if there is no intrinsic desire to attain football wellness, no amount of training will help.
In an attempt to attain Financial Wellness, employees can take the following steps:
- Develop a weekly budget.
- Save up for a rainy day.
- Insure their critical assets.
- Reduce debt to the bare minimum.
- Develop an emergency fund, and so forth.
In the end, financial wellness has to be taken very seriously in the workplace. And It’s left to both the employers and employees to play their different roles. As for Oliver, for those who care, He did turn his situation around for good.
