Employees worried about their personal finances are less productive, more distracted and are easier targets for poachers.
While none of that is a revelation, a recent nationwide survey showed just how pervasive financial insecurity is in the workforce and how large the losses and potential risks are for employers at every level. When asked what they feel stress about, 59% of respondents said personal finances were their number one concern. Other familiar stressors paled in comparison — “my job” at 15%, “relationships” at 12% and “health” at just 10%.
If you have a retirement planning professional who works with your employees, that’s a good start, but the study shows the problem — and effective solutions — go much deeper.
Who’s at Risk?
Not surprisingly, younger, lower-earning employees feel stressed about their finances. But that concern extends all the way up the income ladder and across all generations. In fact, 38% of Millennials reported feeling financial stress, compared to 34% of Gen X and 25% of Baby Boomers.
Employers Impact on Financial Wellness
For companies concerned about a stressed workforce, financial wellness goes beyond having a retirement plan advisor inform employees about their options and basic financial literacy. Formal coaching on handling personal finances can lower stress, boost productivity and increase retention. Employees who participated in a formal financial wellness plan at work say that it helped them prepare for retirement (47%), pay off debt (29%), save for their goals (29%) and control their spending (29%). Demonstrating concern for employees’ financial health could also reduce the allure of jumping ship if they feel your company cares and is taking steps to help them.
Changes, and not Just in Attitudes
Organizations using retirement plan advisors that offer robust financial wellness programs aren’t just engaging in self-interested risk-abatement – they’re signaling to employees that they understand our economic system is undergoing rapid and significant change. The 20th century paradigm of locking into a lifetime profession has been replaced by seismic shifts and massive uncertainty. Companies that offer employees effective help in navigating the new economy stand to benefit from a workforce that is not only more productive, but one that’s more loyal and committed as well.
For more information on financial wellness and preparing your employees for retirement, contact Summit Group 401(k) Consulting at retirementplans@summitgroup401k.com or 757.499.8300.
