Johan Romero Luna
Updated: January 11, 2021
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Consider your workers’ finances
By Johan Romero Luna
It’s been almost a year since we had to adapt to a new normal due to COVID-19. The year 2020 has affected us as individuals and professionals. While the Paycheck Protection Program for small businesses and the stimulus checks to individuals as part of the CARES Act helped in the short-term, behind these programs, looms a more concerning situation: Employee financial wellness, a topic not often addressed by employers. The fact is, just as employees are more productive when they’re physically healthy, the same goes for financial wellness.
Financial health has become a big topic since the 2008 financial crisis. We talk about it in private, read articles, or listen to podcasts, but even now it is a difficult topic to address. That made me wonder why more businesses do not take a more aggressive approach to ensure their workforce has the tools to reach their financial goals.
The American Physiological Association says financial instability has been directly linked to and is one of the leading causes of an increase in stress across the nation. The American Institute of Stress notes stress translates to lack of sleep, depression, absenteeism and high employee turnover.
Your employees could be feeling financially stressed for many reasons: worrying about college tuition for the kids, not having enough for retirement, or the burden of student loan debt. Employers are not the cause of these stressors, but they are in the best position to do something about it. Workforce financial education should be the foundation in establishing a financial wellness program.
For midsize to large organizations, the expectation should be to have a well-structured financial well-being program sponsored by human resources as a free employee benefit. Offering a library, a weekly blog, and learning modules on topics like creating a budget, good debt vs. bad debt, the value of savings, and understanding credit. The goal is to provide understandable resources employees can use.
Businesses should always be thinking what other benefits could be provided for better employee financial stability.
How can small businesses have an impact on their employee financial well-being without the same resources? There are several strategies to take, with the most important and cost-effective being a partnership with a financial institution or nonprofit organization to offer financial education.
Not all financial institutions are created equal and not all of them have an established approach to financial wellness. The best partner can offer a model bringing financial education to business workforces or offer financial coaching in a one-on-one setting to provide workers with tools and resources needed to achieve financial wellness. Once a business has established that partnership, it can promote it as part of employee benefits and help staff navigate the waters of financial literacy with the help of competent hands.
Financial wellness can bring value to any business no matter their size. Having a strategy to address this topic can change the company’s culture and create a more productive environment for the business and their employees.
Johan Romero Luna is assistant vice president and area manager for Workers Credit Union in Worcester.
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