Financial Wellness & Productivity: Reimagining Benefits in the 21st Century, Boosting Productivity Through Financial Wellness
Financial Wellness and Productivity (FW&P) is a new blog series from TrustPlus which explores research on the links among personal finance, individual wellness, and organizational productivity. Each month FW&P spotlights recent research and historic data.
I. Recent Research: Reimagining Benefits for the 21st Century
What: Visionary leaders in businesses, government, academia, and philanthropy are reimagining the U.S. system of benefits, which the Aspen Institute calls “broken,” recognizing our economic and health crises in the age of covid-19. The Aspen Institute’s paper, A Modernized System of Benefits is the Foundation for an Inclusive Economy, offers a vision for an integrated system of benefits that is 1) inclusive of all workers; 2) portable to prevent interruption due to job loss; 3) people-centric to prioritize the experience of those who need it to work; 4) and interoperable across technology systems.
Background: Covid-19 made a bad situation worse. More than 44 million workers lost their jobs within 12 weeks of the onset of the pandemic and over five million people lost health insurance, with millions of people applying for unemployment insurance, living paycheck to paycheck unable to cover an unexpected expense. Almost 60% said they would have a hard time covering $1000 out of the blue and more than 40% said they would struggle to cover $250.
The precariousness of workers’ financial lives, pre-covid-19 pandemic, combined with the suddenness of job losses and surge of demand for benefits overwhelmed state and federal systems. This failure left millions of workers without a paycheck, unable to access unemployment, up a creek without a paddle. As rent and eviction moratoriums end in the coming weeks, the need for interoperability across public and private benefits to ensure continuity of coverage in moments of transition, and increasingly of crisis, has never been greater.
Looking ahead: An integrated, inclusive, portable, people-centric, and interoperable system of benefits will be good for employers, employees, and the economy, offering a reliable lifeline to workers. TrustPlus represents several of these characteristics. We’re easily integrated, inclusive in that we’re available to all employees, portable in that we remain a resource to workers even if they switch jobs, people-centric in how we’re informed by behavioral science and designed with people in mind.
While the pandemic is an ongoing nightmare for millions of low- and moderate-income workers who experience the worst risks and outcomes, TrustPlus Personal Finance Coaches can help workers navigate the benefits ecosystem and get on paths to financial wellness, which, as we explore in article II, is good for them and for business.
II. Historic Data: Improving Financial Health Boosts Productivity
Most low- and moderate-income workers have little to no access to financial education, which leaves employers as the best, and often only, option to fill this gap. Fortunately, a growing body of research demonstrates that supporting employees with personal finance at work can be good for workers and for the bottom line.
In exploring the research on financial wellness benefits and organizational productivity, we start with Joanne Sammer’s article, “How Improving Financial Health Boosts Productivity.” Writing for the Society for Human Resource Management (SHRM), she highlights research showing that a majority of Millenials deal with personal financial issues during the workday and that financial worries contribute to absenteeism and lost productivity.
- Personal finance impacts the workday for the majority of Millenials: Among Millenials, Bank of America/Merrill Lynch found 60 percent spend more than three work hours a week on personal financial issues, i.e. personal finance is on employees’ minds.
- Personal finance worries contribute to absenteeism and lost productivity: PricewaterhouseCoopers found that nearly half of employees who are worried about their financial health miss work and are less productive, spending at least three hours of work time on personal financial issues, costing $3.3 million in lost productivity per year, plus $166,000 per year due to financial-related absenteeism.
Sammer’s article adds to the evidence base at the root of our work and reinforces what we see every day with all types of businesses and organizations, small, medium, and large: supporting employees through TrustPlus can strengthen your organization, reduce absenteeism, increase productivity, and enhance loyalty, motivation, and retention.
Written for human resource professionals and business leaders, FW&P explores the links among an employee’s personal finance, individual wellness, and organizational productivity. FW&P offers a window into the financial lives of low- and moderate-income workers, discusses the latest research on the connection between financial wellness among employees and the bottom line, and shares what TrustPlus is learning every day from our clients: financial health boosts productivity and wellness.