Major stock market indices are near record highs, household balance sheets continue to improve, and there are even signs that wage growth is starting to accelerate. However, such positives are perhaps only going noticed by economists because as we learned earlier this month, many Americans continue to worry about both their near- and long-term financial well-being. That is a problem because research has shown that people who suffer from chronic stress, regardless of its source, have higher rates of sleep deprivation1, overeating2, substance abuse3, accidents4,5,6, smoking7, depression8, and relationship troubles9. Further, the American Psychological Association estimated that stress in the workplace costs U.S. businesses $300 billion annually in the forms of avoidable turnover, reduced worker productivity, and higher medical expenses.
With such statistics it should not be too surprising that many businesses are pursuing financial wellness programs that aim to educate workers and change their financial habits for the better, especially since these initiatives have been shown to have high success rates. For example, an earlier Society for Human Resource Management poll found that 72 percent of HR professionals who indicated that their organization provides some form of financial education to the staff reported that the efforts have been “somewhat or very effective” in improving employees’ financial well-being. Even more encouraging is a new report from the Employee Benefit Research Institute, which found that workers not only recognize how financial stress has hurt their job performance but also welcome the assistance that a wellness program may be able to provide. Specifically, 30 percent of surveyed employees admitted that they worry about money at work, among which 70 percent do so “at least somewhat often.”
Old-age financial concerns appear to be a big factor behind such anxiety because more than half (55 percent) of the respondents who said that they are not confident about living comfortably in retirement reported worrying about their finances at work (compared to just 7 percent for the employees optimistic about retirement). Roughly three in four surveyed workers also said that they believe participating in a financial wellness program would be “very or somewhat helpful,” particularly in the areas of calculating how much to save for a secure retirement, establishing an old-age budget, and planning for potential healthcare expenses in retirement. Moreover, many employees expressed a general belief that any type of wellness program would likely increase their productivity in the workplace, but responses suggest that the biggest boost should come from initiatives focused on retirement planning.
Sources: APA, SHRM, EBRI, et al
Post author: Charles Couch