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April 1, 2024

HR’s Commitment To Employees’ Financial Stability

HR’s Commitment To Financial Stability For Workers

Financial stress always affects a portion of the workforce. In today’s unpredictable market, more employees are carrying money-related burdens with them to work. Employees at all pay levels face rising living costs and growing debt that can weigh them down at work. Financial stress can even lead to employees’ mental and physical health decline, which subsequently slows their professional productivity. The latest statistics point to a need that HR professionals cannot overlook. 

  • Morgan Stanley cites financial stress as the number one cause of employee stress, with more than 52% of surveyed workers reporting that it keeps them up at night. 
  • 49% of employees with financial distractions at work say they spend three or more hours a week thinking about or dealing with their financial issues. 
  • In a year, financial worry could cost companies $3,922 more per employee. 
  • Financially burdened employees are 9X more likely to butt heads with coworkers and 2X as likely to leave their job. 

Given the staggering impact financial stress can have on the organization and its people, HR teams are working to implement financial support benefits for their people, with the goal of improving their state of mind and their financial future. The support tools and resources they’re implementing address employees’ different money concerns to bring value where individuals need it most. 

 

Debt Intervention

58% of 18-25-year-olds surveyed said paying off debt was their top financial concern. Younger generations enter the workforce with student loans and costs associated with getting professionally established. Some employees hope to correct their previous financial mistakes and want to establish better spending habits.  

HR can offer employer-sponsored debt consolidation and pay-off plans that help employees overwhelmed by debt take control of their situation. HR can also educate employees on government assistance programs such as American Financial Solutions (AFS). This non-profit organization offers credit counseling and financial education to those in debt. AFS has helped almost 450,000 Americans pay off over $9 billion in debt. When employees take achievable steps toward debt reduction, they can start feeling and performing better at work. 

Financial coaching can help employees understand how their debt challenges formed and make the most of the learning opportunity presented. Employees can work privately with a financial coach to find the root of their current spending habits and then reshape them into constructive ideas around money and spending. A deeper understanding of the problem can help to create lasting change.

 

Debt Prevention

Financial education, through a class or a private financial coach, can help employees avoid future consequences and establish healthy financial habits. Through discussion sessions, employees discover where they can improve their financial habits and establish financial goals that help them stay on course. 

Life’s ups and downs, along with all the transitions, events, and demands, can lead to financial constraints and additional hardship. However, financial education before and during life’s turbulence can help employees make smart spending decisions. A financial coach can be available on demand to help employees meet their present circumstances with confidence and knowledge. Employees are less likely to make spending mistakes due to haste, panic, or lack of experience. 

 

Financial Leverage

Forbes reports that financial wellness programs are now the most-wanted employee benefit. Employees not only want to know how to address financial problems but also how to make advantageous spending and investing decisions that grow wealth. HR teams are adding support to raise financial literacy levels among their workers. In doing so, HR also provides sources for individuals to get specific guidance on their nuanced circumstances. 

Research finds 59% of older generations ranked retirement planning as their primary concern. A 2022 TIAA Institute financial literacy survey found women tested 10% lower than men in their understanding of spending, investing, and managing risk. The Economist reports that Gen X, Z, and the Millenials lack budgeting skills. Financial education and support programs will make more of a difference if they meet the diverse needs of workers. 

Financial coaching can yield impactful results in diverse teams. It allows employees to address their specific interests and concerns even as they can change over time. Simultaneously, their coaches can help individuals unearth potential gaps in their financial literacy and move them to proficiency before bigger consequences take their toll.  

In 2024, more HR leaders will likely build financial well-being into broader well-being initiatives. HR teams will develop avenues to address financial stress from many angles. Employer-provided financial programs can help workers take control of their financial destiny, pay off debt, and learn savvy money strategies. Workers can end up increasing the value of their take-home pay along with easing their financial stress. Support programs can improve company culture and productivity as much as other HR-led initiatives.

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