Will Employers Respond To Employees’ Quiet Call For Help?
The Commingling of “Financial Unwellness” and Mental Health
According to a recent National Alliance on Mental Illness survey, about one in five Americans struggle with mental health. In addition, other research indicates that well over 70% of Americans are dealing with some degree of financial insecurity, with 40% worried about paying this month's bills.
So why are more Americans experiencing mental health issues and financial insecurity? Are the two issues correlated somehow? And what can employers do to help their employees cope with and overcome these issues?
Addressing employee mental health from an employer's perspective has been long overdue. Numerous factors can cause mental health issues, and their effects in the workplace are inevitable. Financial insecurity is just one such factor, but it's a big one. Others include physical health, domestic issues, workplace stress, or even just problems with the family pet.
Financial Stress In The Workplace
Financial insecurity can definitely lead to stress in the workplace. Employees are most often stressed because they don't know how to manage their finances properly. Sometimes they don't know how much money they should be saving or what kind of investments may be best for them. But more critically, many don't know how they will make ends meet. The idea of which investment makes the most sense is a fantasy for most American workers today. This disconnect leads to an increasing number of people who are not fully engaged at work, suffering silently as stress and worry erode their energy and focus.
The latest study from the Society for Human Resource Management (SHRM) showed that what employees seek most from their employer is a path to greater financial confidence. Half of the employees surveyed said they're distracted at work because they're worried about money. And no wonder since over 65% of workers are living paycheck to paycheck.
It's time that more employers prioritize employee financial and mental well-being to help create a thriving American workforce. A recent study found that more than 1/3 of employers offer employee professional development opportunities. Yet, less than 10% of companies provide mental health support programs, and fewer than 5% offer financial wellness programs. Do employers believe that "we pay them fairly, so they must be doing OK financially”? Nothing could be further from the truth.
A recent Harris Poll by The American Psychological Association APA found that 58% of adults in America are emotionally overwhelmed and fatigued. The main reasons for their emotional distress are financial factors such as debt, inflation, and the effects of the Covid-19 pandemic. These three factors continue to cause significant anxiety among American adults, but in different ways for different groups. For example, while inflation most severely affects people on fixed incomes, others who have lost their jobs or businesses are more affected by the Covid-19 pandemic. But the results can feel the same – a sense of being emotionally overwhelmed and stressed to the point of mental shutdown.
Employers Can Should Be Part of the Solution
Employers should help address these issues holistically, looking at all factors contributing to the problem. In addition, companies should consider providing internal or outsourced support for employees affected by these factors to maintain their mental well-being, job performance, relationships, physical health, and capacity for happiness at home and in the workplace.
Employers can help reduce financial stress by providing educational opportunities and offering badly needed assistance to employees with managing their finances. Where financial wellness & education offerings exist today, they often address retirement planning topics and insurance products. Unfortunately, only a small percentage of employers offer employees access to financial advisory services and one-on-one financial "coaching”.
Often the problem with these offerings is low engagement, meaning far too few employees take advantage of the available resources. Usually, this is because the needs of most employees are much more fundamental and immediate than spending time thinking about a tiny or non-existent retirement portfolio.
Imagine if a shipwrecked man stranded alone for days on an island stumbled across a can of beans and a new Rolex watch. Where do you think he would start?
In today's economy, employers need to offer simple and readily accessible budgeting and cash flow planning tools that help employees understand not only how to track their expenses, but how to structure a lifestyle that makes financial wellness possible. Only when an employee and their family have a realistic ability to achieve positive cash flow month after month does any other financial wellness program mean anything beneficial to them.
So, What's An "Employee Wellness Aware" Employer To Do?
Offer simple resources for "low financial literacy" employees to still make progress and better financial decisions which can result in even a minimal ability to save.
Offer education programs, coaching, and advisory services in multiple areas of personal finance, structured to all levels of employee financial literacy.
Offer mental health and counseling resources for those struggling to cope with stress, regardless of its source.
When employees feel a sense of financial confidence, their mental and physical well-being can improve, and their stress levels will decline. When their employer is proactively involved in helping them achieve that goal, the result will be greater employee satisfaction, company loyalty, and a competitive advantage for all involved. Everybody wins.
