Why Financial Wellness Matters in the Workplace
While Employee Assistance Programs (EAPs) are often thought of as the “go to” resource for behavioral health, substance abuse or family and relationship issues, EAPs can also provide support for employees to manage other problems that negatively impact their work performance. This includes effectively managing financial stress.
Financial issues = stress; stress = deteriorating health
Current research shows that financial issues are the number one cause of stress among employees and stress is the number one cause of deteriorating heath. 1 Even though these statistics are widely accepted, rarely are the dots connected. The medical term for two, co-related issues occurring at the same time is “co-morbidity.”
Financial stress is one of the leading causes of co-morbidity, and can negatively impact other physical and mental health conditions, including:
• Insomnia/sleep trouble
• High blood pressure
• Stomach ulcers
• Muscle tension/back pain
• Severe anxiety or depression
How prevalent is the problem?
According to a 2017 Employee Financial Wellness Survey by Price Waterhouse Cooper (PWC), roughly half of all employees (53%) report feeling stressed about their personal financial situation. Nearly half of all employees (46%) say that financial challenges cause them the most stress in their lives (significantly more than personal relationships, their job or health concerns). More than one-third of employees report that their level of financial stress has increased during the past year.
Financial distractions affect work performance
There is a direct correlation between employees’ financial well being and a company’s bottom line. Employees’ financial distractions are shown to negatively impact company profitability because of:
• Elevated health care and disease management costs
• Higher absenteeism and presenteeism rates
• Decreased employee productivity
• Increased turnover rates (e.g., financial stressed employees are more likely to leave one company for higher compensation at another)
Many Employee Assistance Programs include financial counseling as part of their core program. For example, Aurora’s EAP offers members an opportunity to have private 30-minute phone consultations with an experienced financial coach on various financial topics. They can discuss any financial matter causing them stress or concern.
Typical areas of concern include:
• credit issues
• debt and budgeting assistance
• mortgage issues
• tax planning
• retirement savings
• college planning questions
Financial woes impact behavioral health
An EAP assessment may uncover that employees are dealing with behavioral health issues (depression, anxiety, relationship problems and alcohol or drug abuse) that actually stem from their financial difficulties. EAP counselors are trained to help employees recognize how these issues are related and to assist them in getting the help they need.
Receiving personalized guidance is critical to making behavioral changes and helping employees stay motivated and feeling supported throughout the process. If specific problems employees face are beyond the scope of EAP counseling, appropriate referrals to community resources are made.
Incorporating financial wellness into the workplace
Incorporating financial wellness into the workplace can make a real difference to employees. Financial professionals can help employees increase their financial knowledge and take the steps needed to decrease their overall level of financial stress.
Once their immediate financial concerns are addressed, these same employees are more likely to increase their savings and make progress toward long-term financial goals, such as boosting 401(k) contributions for retirement or saving for a home purchase or their children’s education. These employees are more likely to feel in control and happy with their financial situation and less stressed at work.
Employees need to be reassured that the EAP is a confidential resource available to help them address life challenges that may be affecting their work life — including any financial concerns or stressors they are experiencing.
Increasingly, more and more employers realize that promoting the full scope of EAP benefits — from traditional counseling and management consultation to work-life balance services such as financial wellness — can improve employee engagement, loyalty and productivity. A question that concerned employers should be asking is: Are we effectively addressing the financial wellness challenges that our employees are facing as part of our overall wellness program?
Pauline Krutilla, director of EAP at Aurora Health Care, is available to talk about what makes an effective EAP program, and what every employer needs to know. Visit AuroraEmployerSolutions.org
1 “2015 Stress in America™, American Psychological Association, http://www.apa.org/news/press/releases/stress/2015/snapshot.aspx