A recent headline in Forbes stated that 30% of millennials would “sell an organ” if it would relieve them of some of their student loan debt. Wow — talk about desperate! After getting past the shock of reading that statement, I thought more about how that financial burden can impact people in their every day lives. Their stress must be through the roof, affecting their sleep, their performance at work and personal relationships. It not only affects their mental health, but ultimately their physical health as well.
Millennials are not alone when it comes to financial burdens and stressors. The 2008 financial crisis had a severe impact on many Gen Xers and Baby Boomers. Retirement funds were lost, home values plummeted and company layoffs were common.
Stress related to financial challenges can really take a toll on one’s overall health. Results from the Associated Press-AOL health poll show the significant impact financial worries can have on a person’s physical health. Moreover, taking the steps to remedy such situations can be a very difficult decision for people to make.
So what does this have to do with business? Could it be that an employee’s personal financial issues are impacting how they function at work? If they are willing to give up a kidney for some relief, I bet it is. Their financial issues are impacting your bottom line.
You have probably heard that many companies are now establishing financial wellness programs, but like many, you might not know what it really encompasses. Historically, employers’ role in the finances of their employees has been through their retirement plan benefits and maybe with an underutilized employee assistance program. This approach has not been effective, especially for individuals looking at a mountain of debt. Retirement is not even a consideration given their current circumstances.
Similar to making changes to one’s physical and emotional well-being, taking action on addressing your financial situations can be just as daunting. Medical professionals and employers have found that education on health issues and disease does not create behavior change. Moreover, as we say in health coaching, "shoulds" don’t result in behavior change. Most people know they "should" exercise more or eat healthier, but that does not result in us actually doing it. The same is true for financial wellness — most people know they "should" pay off credit card debt and save for retirement, but that can be easier said than done.
As with health related wellness, there is no "one size fits all" approach to financial wellness. Employees are at different places on the financial wellness spectrum and have varying preferences for accessing services they may need.
A successful financial wellness program will include both educational information as well as resources. The educational component should cover the various aspects of an employee’s financial life, such as debt management, college education funding, mortgages, credit management, retirement planning and budgeting — just to name a few. Available tools and resources should encourage people to take some sort of action. They may include, a financial wellness assessment (similar of a health risk assessment) which outlines the bigger picture of an individual’s financial situation, and access to financial consultants or financial planners to identify and guide employees through the first steps in the process.
The following are a few best practices that I would recommend to those considering implementing a financial wellness program for their employees:
Education and awareness alone will not lead to behavior change, but are a necessary component of the program.
Offer a variety of resources, from debt management, budgeting, educational resource planning, to retirement planning services.
Services modalities should vary — in person, online, telephonic, or self-service. Financial coaching (regardless of delivering method) can be helpful as it offers additional motivational support and accountability.
For more information on financial wellness programs, contact us.
During the White House’s Summit on Working Families on June 24, 2014, President Obama indicated he was signing a presidential memorandum requiring every federal agency to address flexible work schedules and give employees the right to request such schedules. Absent what could be a dramatic increase in workplace flexibility for federal employees, it is undeniable that the demand for flexibility and work-life balance is on the rise.
Public health insurance exchanges have a head start over private exchanges, but in the coming years, employer and employee awareness will increase, and soon the private options should receive the recognition and utilization they deserve.
Send a Message
Find a Location