Employees with personal-finance problems can be a drag on a company’s bottom line.
The stress and anxiety that come with money issues at home can lead to diminished productivity at work, health problems and workers looking to change jobs in search of a higher salary.
Employers who aren’t concerned about their employees’ finances are hurting only themselves. Companies can do more than provide a paycheck to help their workers achieve financial security.
Statistics from www.cred itcards.com paint a startling picture. Out of 10 American workers:
b 5.7 of them don’t budget.
b 4 are spending 110 percent of their household income.
b 3.2 of them have no savings.
The survey also reveals significant consumer debt and relationship problems:
b 2.6 of them don’t pay all their bills on time.
b 5.6 of them have credit card debt, averaging $16,000.
b 5 of them will get divorced, citing fights about money as one of the reasons.
Yes, these people may be your employees or co-workers.
Many employers now recognize the potential for their employees’ personal debt to harm work performance. Employees with serious financial problems can waste as many as 20 work hours a month worrying about their finances.
Companies can help themselves by helping their employees through a systematic plan for personal-finance education.
Results from a Lampo Group survey of 10,000 employees who took a personal-finance class are encouraging:
b 89 percent began using a written budget to manage their money.
b 91 percent felt more confident about their financial futures.
b 98 percent recommended personal-finance education to fellow employees.
McLeod Health, a regional medical center in Florence, S.C., has implemented a financial-literacy program for its employees. Nearly 10 percent of its 4,700 workers have participated.
The 450 McLeod employees have made dramatic financial improvement by paying off and saving a combined $1.5 million and they have destroyed more than 500 credit cards.
A typical personal-finance class meets weekly and lasts one to three months. A focused and motivated household can pay off all non-mortgage debt in 12 to 18 months after the class.
A local business owner who took my personal-finance class has experienced similar results. She and her husband have paid off all of their non-mortgage debt and are now working on paying off their business debt. And when collection agents started calling an employee at work, they paid for her to take the class, too.
They report feeling more comfortable and secure knowing that their employee is taking control of her personal finances.
Employees who aren’t worried about their personal finances are far less likely to have unplanned absences. They can concentrate better and engage with their co-workers more effectively. Their productivity and loyalty increase, too.
So why wouldn’t an employer want to help its employees through difficult financial situations? By reducing stress about personal finances, a company is not only helping its workers, it’s benefiting its bottom line.
www.DebtFreeTribe.com Durango resident and personal finance coach Matt Kelly owns Momentum: Personal Finance.