Employees are struggling with financial wellness, causing decreased job performance and increased stress. In an effort to expand the path to improvement, industry groups are encouraging lawmakers to help engages employees.
Twenty-four percent of employees feel distracted at work, 29% of defined contribution participants report missing work to deal with the emotional stress caused by their finances, 47% of DC participants feel they are living paycheck to paycheck and 61% of U.S. workers lack a savings cushion for emergencies, according to State Street Global Advisors.
Employees also don’t like to think about these issues or discuss them. “One reason retirement is something we avoid thinking about is because it involves a lot of things we don’t like to think about, like death and dependency,” said Megan Yost, State Street’s head of DC participant engagement, at a Sept. 16 event on Capitol Hill sponsored by the American Benefits Council.
Yost adds that stressed employees are taking a toll on workplace productivity, causing employers to address the need. She cited an Aon Hewitt study that shows financial wellness currently tops U.S. plan sponsors’ list of priorities for 2016, with 56% of employers planning to focus on financial stress in 2016, up from 46% in 2015 and 30% in 2014.
“Employers have seen employees struggling with increasingly high deductibles and that is adding to the overall stress with finances,” said Jennifer Benz, CEO of Benz Communications, a San Francisco-based consulting firm. “We have been encouraged by how much interest there is from large employers and how high-touch they want to be with creasing programs that are good for their employees.
Policy changes
But, it moves beyond actions by employers, Benz added, turning to the crowd of Capitol Hill staffers, reminding them that when creating policy they should focus on the user experience, the employer prospective and the potential unintended consequences of future policies.
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She suggested focusing on human approaches, such as: keeping it simple, small steps, positive framing, logic and emotion, storytelling and making it about an employee.
“Keep things really simple and help individuals take small steps relevant to them, because that is how people change behavior,” Benz said. “Focus on positive framing, because the ‘sky is falling’ framework does not inspire people.”
As HR departments continue to be stretched thin, they are focusing almost entirely on compliance, leaving no room for employee education, which is important when it comes to financial wellness, Benz added. “Compliance takes priority among employers and takes away their ability to educate and help employees,” she said.
She explained that the government should focus on easing the compliance burden on employers, so they can instead focus on getting employees engaged. She particularly pointed to enacting a safe harbor for rolling in retirement accounts from previous jobs.
“All of this [compliance] adds to [employer] legal concerns,” Benz said. “Employers are risk adverse. Anything that is unclear, an employer will go on the side of the caution.”
“[We] want to make sure any future legislation does not create more of that,” she added.
