Personal finance is ranked as a leading cause of employee stress in the United States each year. Neighborhood Trust Financial Partners found that nearly 50% of U.S. employees suffer from financial stress and The American Psychological Association conducted a study that concluded 72% of Americans have stressed over money at least once in the past month.
If employers want to improve retention, raise workplace morale, and create a more engaged and present team, then prioritizing a financially stress-free environment is key. To do so, employers must prioritize educating employees on healthy financial habits and providing them with the encouragement needed to help them achieve their financial goals.
Take Time to Understand Budget
It can be easy to forget the importance of a well-thought-out budget, however, encouraging employees to take some time to flesh out a monthly budget will help them keep tabs on their spending and stay on track to reach their financial goals.
Start out by having employees write down all necessary expenses such as rent and utilities, as well as their monthly income. This will help them gain a clear vision of what money they have leftover for wants (as opposed to needs) and savings. Give your workforce budget templates and spreadsheets to make this process easier.
Incentivize Employee Financial Wellness Goals
While giving your workforce the education they need to start tracking their finances is the first step in creating a financially stress-free workplace, rewards and incentives will be an even greater motivator to help employees reach their financial goals. In a study done by the Society of Incentive and Travel Executive, employee incentives were proven to drive performance up by 27%. So when it comes to finances, providing gift card incentives to keep employees motivated and on track can drastically improve the outcome.
Not only are gift card incentives a great motivator, gift cards remain the #1 most-requested reward throughout all incentive and rewards programs and they offer instant, contactless delivery, which is ideal for remote or dispersed workforces.
Incentivizing employees with small gift card rewards for hitting their weekly or monthly financial goals can lead employees to feel empowered to take control of their finances.
Encourage Employees to Check Up on Their Credit Score
Credit scores are often overlooked, so it is important to encourage regular credit score checks to give employees a better idea of what financial areas in their life may need improvement. Although credit scores don’t directly affect how much money one has or makes, they can greatly affect the ability to sign up for credit cards or take out loans, such as a mortgage or car loan. Remind employees that checking up on their credit score is free and won’t negatively impact their credit.
Owning a home can often be less expensive than renting and will give employees the pride and satisfaction that comes with being a homeowner. If an employee is considering buying a home in the near future, they may want to take a look at what credit score is needed to buy a house. This will give them a clear credit goal to strive for.
Raising one’s credit score can be accomplished in a variety of ways, from paying down debts to ensuring bills are paid on time. Make sure to equip employees with this information and let them know that checking up on credit score will take the guessing out of their finances. This will put employees in control, which in turn will likely reduce their stress and anxiety around their financial situation.
While employees may not be comfortable giving out their specific credit score, celebrating important financial milestones such as buying a house with your staff will create an open and more engaging environment.
Educate Employees on Emergency Funds
Encouraging your workforce to keep an emergency fund can alleviate stress and will give employees the confidence that they are making smart financial decisions with a portion of each paycheck. Financial experts recommend that emergency funds should have about three to six months of one’s living expenses.
Giving rewards to employees for completing financial wellness practices will create an excited and more engaged workforce. While it may not be the same as a typical sales incentive, it can create a more open and communicative environment that will alleviate financial stress and allow employees to see a future with their company long-term. Now it’s time to put in the work and create a financially stress-free work environment!
Financial stress is often forgotten when it comes to health and wellness, but it's important to note the effect it can have both short-term and long-term when it comes to overall wellness. Download our free white paper: What Impact Does Financial Stress Have On Wellness?