Almost daily on the news feeds, we read about how personal debt has risen to record highs. People are spending more and saving less and the pursuit of ‘things’ seems to be never-ending. It was only 2 or 3 decades ago that credit was not that easy to come by. Now, banks and lending institutions actively push credit onto their customers. And we all seem to love credit. We can buy what we want with little thought put into whether we can actually afford the items. Having more stuff is not making us happier either. Studies have shown that people who manage their debt well with minimal spending experience similar levels of happiness to those with lots of stuff (and debt).
Why are we struggling with financial planning:
- We lack the urgency to prioritize our financial affairs. About 5 out of ten workers (54%) have not tried to calculate how much they need to accumulate for retirement (EBRI, 2010). About 3 in 10 workers (31%) have not saved for retirement. Seventy percent of workers plan to work for pay after retirement to supplement their income (EBRI, 2004).
- Lack of knowledge and education about budgeting and all the ways money can be invested and saved.
- Even those that plan, often fall down on the execution of the plan. We have to follow through with our money objectives and plans.
And if we as employers think that employees can leave their money stresses at home when they come to work, we are mistaken. Productivity can take a big hit when you have stressed out employees. The June 13, 2016 edition of the HR Reporter states that estimates of productivity lost due to personal financial issues average 500K per employer per year.
So what can employers do to help?
Providing financial wellness programs for employees to participate in can help an employee alleviate stress and be more focused at work. Many employee assistance programs also provide employees with one-on-one access to financial counselors. If an employee can get an action plan in place for their financial health, not only will they be more productive on the job, but they will also be more likely to stay with your organization. These programs can be a great tool to attract and retain talent. But remember to be proactive and remind employees of the offerings and provide reference material and online resources where applicable.
Of course many employers offer pension plans and retirement savings matching plans, which can definitely help alleviate some of the stress of saving for retirement. Employees are more likely to save when done through the workplace. But the spending habits and lack of money management of employees today can seriously impact their retirement and negate some of the benefits of these employer offered plans. And even when employees maximize the savings provided by employers, it just may simply not be enough to satisfy their personal responsibilities and demands in retirement.
Financial health is becoming increasingly as important as physical and mental/emotional health; and employers need to be cognizant of all 3 to have happy, healthy (and productive) employees.
About the Author:
Marnie Larson is the CEO of StarGarden Corporation and oversees its operations in Canada, US and New Zealand. She has over 20 years’ experience in the software industry and specializes in HCM, Business process automation and Workflow technology.
HR Reporter, June 13, 2016 edition
Benefits administration and managing the many aspects of health, retirement and other benefits of employees can be easily done using StarGarden's HCM system. Talk to us today to find out more !