• Researchers and business experts recently measured the extent of financial distress in the workplace. The conclusion: “Thirty million workers in America — one in four — are in serious financial distress and dissatisfied with their personal financial situations.”

• These employees are unhappy with their finances and they worry about money, debt and bills.

• They worry about having enough money to live on once they retire.

• They often lack confidence about their abilities to manage personal finances. Many do not even have hope that they might one day be able to catch up financially.

• People at all income levels experience distress about financial matters.

• Employees who are stressed about their personal finances, who are not making good money and credit management decisions and who have not wisely selected among employer provided benefits cost their employers between $450 and $2,100 annually. This is wasted employer money.

• Financially distressed workers spend time at work worrying about personal finances and dealing with financial issues instead of performing on the job. A Virginia Tech Study suggested some employees spend as much as 27 hours every month.

• A large proportion of those who are financially distressed, 40% to 50%, report that their health is directly impacted-negatively-by their financial worries and problems. Health problems caused by financial distress cost employers big money. Examples of other direct costs are absenteeism, short-term disability, turnover, wage garnishments, and accidents.

• In short, financially illiterate employees do not make the best decisions for themselves or their employers.

“Why should employers care about employee financial literacy?”

• Employers have a large stake in employee financial literacy. Why? Because increasing employee financial literacy improves employer profits. It is that simple.

• Employees often lack confidence and may believe more income or another job is the only solution. A bigger income would be nice but that alone is not the solution for better financial well-being. What does increase one’s quality of living is improving financial literacy and putting into practice good financial behaviors.

• A national award-winning research study by Dr. So-hyun Joo concluded that employers increase profits by $450 annually for each employee who slightly improves his or her financial behaviors. The return comes from reduced absenteeism and less work time used dealing with personal financial matters.

• Financially literate employees practice good financial behaviors. They save and invest within their employer’s 401(k) plan at a level sufficient to anticipate a comfortable retirement.

• Where appropriate for their situations employees sign up for health care and dependent care reimbursement plans.

• When given a choice in health care plans employees select one that best suits their situation that often is not the most expensive.

• Importantly, financially literate employees typically enjoy better health.

• The most important part of financial literacy is to apply the knowledge by practicing good financial behaviors. People cannot build assets without good financial literacy. Moreover, it is vital to empower employees to be financially literate.

We hope the information above will encourage employers to provide to their employees access to resources, education, counseling, and advice to decrease their stress about money matters and improve their financial lives.

CCMS provides basic financial counseling and education at no cost to the employee or the employer.

To request or sign up for more information – CLICK HERE

Data source: Dr. E Thomas Garman, Professor Emeritus and Fellow, Virginia Tech University.