America’s workers are facing a challenging financial landscape. While inflation has slowed down, grocery prices remain high, and mortgage rates continue to make homebuying unaffordable. While a recent WalletHub survey showed that 66 percent of employees believe their finances will improve in the new year, 56 percent are still concerned about the lingering effect on inflation.
Employees can’t forget about financial concerns when they are in the office. Their worry carries over into their work, with SoFi finding that a quarter of employees experience lower productivity due to financial stress, signaling an opportunity for employers to provide support during financial hardships.
Spotting signs of financial stress
Common indicators of financial stress in the workplace can be categorized into two variations: tactical and behavioral.
A tactical indicator includes an employee taking action to supplement gaps in their finances. For example, individuals without immediate access to cash or affordable credit may consider alternative sources to secure the funds they need, such as a hardship withdrawal or a loan from their 401(k).
On the other hand, a behavioral indicator is sometimes more subtle and includes changes in an employee’s behavior. For example, a traditionally vocal employee can signal financial stress by disengaging during team discussions or company celebrations and events. Further, financial stress can even affect an employee’s ability to concentrate on work while in the office, impacting both the quality of work and volume of work completed. In fact, a recent report from BrightPlan’s Wellness Barometer found that financial stress costs U.S. employers $183 billion annually.
As HR professionals, we know that employees are strong contributors to the workplace when they bring their best selves to work. Establishing a system to efficiently monitor these indicators in collaboration with people managers can facilitate a swift resolution.
Empowering employees with the support they deserve
Identifying and understanding employees’ financial pressures is only one half of the equation. With fewer than 20 percent of employees surveyed saying they felt confident their organization addresses their financial needs well, there is an opportunity for employers to remind employees of financial wellness benefits that are often overlooked or didn’t realize are available.
For HR leaders looking to strengthen and refine their financial wellness strategy, consider starting here:
- Solicit direct feedback: Employee needs continually evolve, and the voluntary benefits offered in previous years may no longer have the same impact. Implementing an annual benefits feedback survey at the beginning of each year is advantageous for assessing the utilization levels of existing benefits, identifying desired offerings, and determining beneficial options that could be expanded. This approach provides employers with more understanding of what benefits to consider and provides insights on effectively promoting these benefits to underscore their value.
- Personalize and promote benefits: The financial well-being of employees is often viewed as a private matter; however, with extensive knowledge of employees’ total rewards packages, HR leaders are uniquely positioned to advocate for employees.
Inviting benefit partners to conduct bi-monthly or quarterly lunch-and-learn sessions on financial topics that are of interest to employees can enhance the role that employers serve in employees’ financial well-being. Additionally, identifying and promoting financial resources in internal communication channels, such as EAP benefits, can proactively foster a supportive environment that encourages employees to engage in conversations they may find difficult to initiate.
- Expand your voluntary benefits: Emergencies happen, and they are rarely cheap. According to a recent report, the average expense of an emergency is now at $1,700, a 16 percent rise year-over-year. Yet, nearly half of Americans have less than $500 in their savings accounts. And those without savings or immediate access to cash to address emergency purchases may be forced to choose unaffordable credit options to meet a sudden need.
When evaluating voluntary benefits, consider modern benefits that aim to support employees with varying financial needs, such as an employee purchase program or emergency savings fund. These financial wellness benefits are offered directly through payroll deduction and often come at low or no cost to employers.
Great Leadership Starts with Empathy and Action
Financial stress can impact anyone. When it does, its repercussions may affect the way employees approach work. By monitoring signs of financial stress, continuously providing financial resources, and uncovering benefit programs that can assist in emergencies, employers can help employees navigate difficult times and achieve a better financial future.
