From beanbag chairs to on-site gyms to chef-prepared meals, businesses are focusing on employee happiness and workplace culture more than ever before. While a fun environment certainly keeps workers fueled throughout the day, employers could be missing a bigger opportunity to make employees happier and more productive by simply addressing their financial anxiety.
Over the past several years, getting ahead financially has become harder, especially for young people. Americans are experiencing record-breaking levels of student loan debt, which have come during a time of income stagnation and skyrocketing real estate prices. Millennials, who make up a growing share of the workforce, are most stressed about debt and making student loan payments, so it's no wonder that financial anxiety is on the rise.
Not surprisingly, financial anxiety has serious effects on productivity and performance at work. Here's what employers can do to help.
The Link Between Money and Anxiety
"Money Anxiety Disorder" is an increasingly common term used by therapists to describe general stress and emotional strain related to money. Though it's not yet an officially designated term, it's helping push into mainstream ideology the notion that money is inexorably linked to overall wellbeing. There's no shortage of statistics to back the claim up; one study, by the Fed, reports that 44 percent of Americans couldn't cover a $400 emergency. Another study, by Bank of America Merrill Lynch, found that 56 percent of employees are stressed about their personal financial situations.
While general money stress can be linked to a number of factors—a lack of savings, worry over retirement, bills that grow faster than income—it seems as though debt has a particularly negative emotional impact. In fact, the European Journal of Public Health has determined that debt (of any kind) can lead to depression or anxiety, with debtholders three times more likely to experience one or both. Millennials cite student debt as their biggest financial worry, even more than credit card debt: 56 percent of millennials say that they worry about student loans "often" or "all of the time," including at work.
How It Hurts Employees (and Employers)
Not only are workers stressed about their finances, but they are losing full work hours and days to dealing with their anxiety. Twenty-one percent of employees say that they spend a whopping five or more hours per week dealing with money issues, and 22 percent spend three to five hours. Overall, each worker spends an average of about two hours a week dealing with money, which amounts to nearly 100 hours of lost work per person per year. Yet another study shows that workers with financial stress are twice as likely to use sick time when they're not physically ill.
It's not just employees who are at risk. Their money anxiety contributes to overall "productivity losses, increased absences and healthcare claims, higher turnover, and costs associated with workers who cannot afford to retire" for employers, according to the Center for Financial Services Innovation. A company with an interest in increasing the productivity of its employees should find meaningful ways to support their financial wellness.
What Employers Can Do
Popular requests for benefits include financial literacy coaching, financial counseling, and sign-on bonuses. In particular, a benefit that is in increasingly high demand is the employer-led addressing of student debt. As many as 93 percent of employees with student loans say they would take advantage of an employer-driven loan repayment program, according to a study called Young Workers and Student Debt. Another study reveals that millennial workers would prefer student loan help twice as much as retirement contributions.
This isn't a huge surprise, considering that 44 million people in the United States currently have outstanding student loan balances that average over $37,000 per debtholder. Kara Perez, founder of Bravely, a financial literacy event company for women, used to be one of those people. She remembers that time she was racked with anxiety, and paying off her student loans changed everything: "After I paid off my debt I felt like a weight had been lifted. I mean, I literally felt lighter. I was just way less stressed about paying my bills, and I knew I could finally start working towards saving money, which felt amazing. It was a whole new world."
One easy way to offer student loan benefits is through a program like CommonBond for Business™. CommonBond for Business works with a company's HR department to help employees tackle their student debt in these four ways:
- Making contributions toward outstanding student loan balances.
- Evaluating employees' student loan situations and giving personal recommendations.
- Helping employees refinance their existing loans.
- Offering employees low-interest student loans for themselves and their families.
Whether it's through a student loan debt repayment program or other financial wellness offering, employers who want to positively affect their employees well-being and productivity would be well served to investigate and implement programs that aim to improve employee financial health. It might not seem as tangible as installing a ping pong table in the break room, but an emphasis on financial wellness has the real potential to support happier, healthier, and more productive employees.
Head here for more information on CommonBond for Business, and learn how your company can help your employees both in and out of work.