Traditional views of wellness focus on exercise and
nutrition. And frankly, if everyone ate and exercised perfectly, life would be
better for all of us. But counting steps, joining exercise challenges and
eating healthy lunches are so much harder when we're stressed about money. It's
time to take a look at the relationship between financial wellness and overall
well-being. Here are a few reasons why financial wellness is a critical part of
employee well-being:
Finances are a major stressor. Work
isn't the only thing stressing employees out ─ money can be a huge source of
anxiety. In a 2015 PwC survey of working adults in the U.S., 45 percent of
respondents said dealing with their finances is stressful. For some, money can
be a constant source of stress. In fact, a 2015 report conducted by the
American Psychological Association (APA) found that 72 percent of adults feel
stressed about money at least some of the time, and 22 percent experience
extreme financial stress. When it's extreme, health suffers. Some respondents
said they thought about skipping or actually did skip doctor visits because of
financial concerns.
The same APA study found that those in lower-income households with extreme
financial stress are more likely to engage in unhealthy behaviors to manage
that stress. Think watching TV for hours, ice cream binging and drinking one too
many to manage that stress. We know that chronic stress is unhealthy on its
own, but financial stress multiplies the impact. People may avoid health
investments to save money.
Managing finances takes time. Managing
finances isn't just stressful, it's time-consuming. Without control of their
financial health, employees bring their worries into the workplace. In fact, 37
percent of those surveyed by PwC said they spend three or more hours at work
each week thinking about their personal finances. Some employees even miss work
due to money woes, according to a SHRM survey in June 2014. Among HR pros
surveyed, 37 percent indicated that employees had missed work because of a
financial emergency. And another study published by Rand in 2015 found
that lack of sleep, financial concerns and taking care of family members are
negatively associated with productivity. Stress is distracting -- and when employees worry about their financial
wellness, they lose focus and are less productive in the office.
Employees want support. Employees
feel the burden of all this stress, and they want their employers to help
support financial wellness. Although the SHRM study found 81 percent of HR
professionals said they provide retirement planning to their employees, a
majority don't provide credit score monitoring or financial literacy training. But
employees, especially those just out of college, want financial planning
benefits.
In a 2015 survey of employees ─ published by Quantum Workplace and my
company, Limeade -- almost 40 percent of employees younger than 25
said they wanted their employer to provide these benefits. Employees who feel
stress from money issues are looking for help to improve their financial
wellness.
Financial wellness improves engagement.
In our study, 71 percent of employees surveyed said they want
standard-of-living raises -- but only 31 percent of employers provide them as
financial benefits. I'm a big fan of market -- and merit-based pay -- but
employers should be aware of cost-of-living realities, especially for
lower-paid employees. Cost-of-living adjustments account for increased living
expenses due to inflation. They may alleviate stress and allow more work focus.
When you give employees these raises, they're 15 percent more engaged, on
average.
Providing financial benefits also shows employees that the organization cares
about them as individuals, inspiring loyalty and motivation. When employees
feel their employers care about their health and well-being, they're 38 percent
more engaged. Investing in financial wellness boosts the overall well-being of
employees, increasing their health, productivity and engagement.
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