Financial stress in employees is always around, even in the good times and bad. The pandemic only worsened how much stress most employees were experiencing. Surveys have shown that low-income and high-earning employees both experience financial stress, so just paying your employees more isn’t always the solution.
When employees are dealing with financial stress, it doesn’t just affect them but causes disruptions to the whole working environment. Stress is contagious. When an employee is stressed, they are likely to impact the whole company’s bottom line.
Financially stressed employees are likely to be distracted, they are more likely to take time off, they are more likely to look for new employment opportunities, and they are more susceptible to accidents at the workplace. All of this equals a worse work environment for all and higher expenses for the employer.
This is why employee stress should also be a worry for all employers. Here are some things employers can do to help employees manage financial stress.
Offer Financial Wellness Programs
The best thing employers can do to alleviate financial stress in employees is by educating them about financial management. Most companies do offer these programs but are usually just one-day seminars that don’t really benefit employees a lot. Employers should offer comprehensive financial wellness programs that help better their employee’s financial behaviors.
Making positive changes in how employees use, save, and invest their money will lead to employees learning how to manage their finances better, which leads to lower financial stress. Good wellness programs also lead to better employee loyalty and higher morale.
Set up Savings Programs
According to most financial experts, employees having no money saved for emergencies is their biggest cause of financial stress. Employers should set up an ESA or emergency savings account for their employees.
The deposits in these accounts are taxed as income and can be withdrawn by employees at any time. The thought of having to dip into their retirement account in any case of emergencies will be gone, and employees will be relieved from financial stress.
Help Employees Save for Retirement
Nearly 60% of employees in the United States say that they are stressed about not saving enough to retire comfortably. Employers can help manage this stress by providing and encouraging their employees to use retirement plans.
Educate them about the retirement plan tax benefits and match contributions to their retirement accounts. The more ‘ready’ an employee will feel for a comfortable retirement, the more stress-free they are likely to be.
Pay On Time!
This point might seem obvious, but late and/or erratic salary payments are a huge addition to financial stress. Employers should ensure their employees get paid on the same day or time every week or month.
Timely salary disbursement might be harder for small businesses but placing contingencies to provide salaries at the right time should be made a priority. If payments do get delayed, employees should get a warning in advance to prepare them for the delay.
Reduce Non-Financial Sources of Stress
Sometimes financial stress can be overcome by minimizing other sources of stress. Provide them with easy commuting options, and maybe allow them some remote working options.
Provide them with more time off or more flexibility. Talk to your employees to get an understanding of what they really want. Anything you can do to make their work and life easier could help employees manage financial stress.
