What Are Your Employees Hiding From You?

What Are Your Employees Hiding From You?

It’s about time you learn what your employees don’t want you to know about their financial situations. Find out what “faking normal” is and how wellness benefits can reduce financial stress.

“Faking normal” is a term that Elizabeth White uses in her powerful TED talk on the personal finance crisis in America. The term describes what most Americans’ facing serious financial instability are prone to do –  pretend everything is fine. Some of your employees are probably “faking normal” right now.

“The truth is it really doesn’t take much. The median household in the US only has enough savings to replace 1 month of income. 47 percent of us cannot pull together $400 to deal with an emergency. A major car repair and we’re standing at the abyss,” White says. This is a reality for many Americans, regardless of education or employment history.

“Shame keeps us silent and siloed,” she adds, “We live in a world where success is defined by income. When you say that you have money problems you’re announcing, pretty much, that you’re a loser.” For many of those struggling with debt, the people closest to them would never know because they take great pains to hide what’s considered to be a failing.

White believes individuals need to hold themselves accountable financial failings, but it’s important employers recognize, “systemic factors that have caused a $7.7 trillion retirement income gap,” like, “flat and falling wages, disappearing pensions, through the roof costs on housing, pension, healthcare and education,” that have built over the last three decades.

Until there’s large-scale reform to address the financial crisis, White recommends “smalling up.” She describes it as, “figuring out what you really need to feel contented and grounded.” An example she uses is a friend that drives beat-up cars but loves music so much they would scrape to save and spend $15,000 on a flute. Employers offering financial wellness benefits can help employees recover from debt and build budgets so they can spend their money on what matters most to them.

White says it’s also time for skilled workers to embrace “bridge work,” which she describes as jobs that don’t utilize the education or work experience that someone may have built up. She’s not suggesting that people be content with it, she’s suggesting that “bridge work is what we do in the meantime while we’re figuring out what is next.” Supporting employees that might need to work a side hustle to pay down debt and build savings can reduce some of the stress associated with maintaining appearances that all is well.  

It’s clear that even if employees are well educated and appear financially sound, there’s a good chance that some of them are acting as if everything is normal while dealing with high levels of financial stress. Employers who acknowledge this and offer financial wellness benefits are likely to see an ROI with higher job satisfaction and thus, better retention.

Revealing Research on Financial Stress and Productivity

Revealing Research on Financial Stress and Productivity

Revealing research from Fidelity Investments highlights the toll financial stress takes on productivity through increased absenteeism.

Absenteeism doubles for employees with high levels of debt, according to a recent study by Fidelity Investments.

The study focused on the four pillars of well-being (financial, health, work, and life) and found that employees struggle most with their financial well-being. A whopping 98 percent of respondents reported feeling stressed in the past three months. Employees reported high levels of stress caused by debt (33%), saving for the future (34%), their job (47%), and their weight (30%).

Workers with high levels of debt were very unlikely to be in “excellent” health, only 14% compared with 35% of workers without debt issues. Those struggling with debt were also less likely to get enough sleep and more likely to be frequently stressed or anxious. On average, employees with the highest levels of debt missed an additional full week of work more than those with the lowest levels of debt.

Past-due medical bills were the leading indicator of workplace absenteeism, followed by payday loans, personal loans, retirement plans, and mortgages. Surprisingly, student loans and credit card debt were not significant causes for employees to miss work.

“When it comes to total well-being programs, employers have traditionally focused on health, but have recently expanded efforts to include financial wellness. Financial wellness programs have gone a long way toward helping workers to create a budget they can live with and have helped many employees consolidate and/or minimize debt,” said Jeanne Thompson, head of Global Workplace Insights, Fidelity Investments.

Strong healthcare plans, retirement plans, and payday advance programs could reduce absenteeism and help employers take back productivity. In order for those systems to be effective, however, employees must learn how to manage their money. Financial wellness programs, like Best Money Moves, lower the high levels of financial stress employees experience by helping them take control of their personal finances.

5 Industries That Desperately Need Financial Wellness Solutions

5 Industries That Desperately Need Financial Wellness Solutions

With the pension era over and Social Security projected to be tapped out within two decades, employers in every industry are stepping up efforts to help ease financial stress on employees by providing desperately needed financial wellness solutions.

This is smart: The majority of Americans report that money is a “somewhat or very significant” source of stress, with parents and younger adults reporting high levels of financial stress, according to the American Psychological Association.

The issue is bleeding into the workplace as nearly half of employees report that financial challenges cause the most significant stress in their lives, according to the 2017 Employee Financial Wellness Survey. “Stressed employees are found to be less productive, take more time off to deal with financial matters, are more likely to leave the company for higher compensation, and are more likely to cite health issues caused by financial stress,” the survey reported. This shows “a direct correlation between an employee’s financial well-being and a company’s bottom line.”

That’s why savvy companies are adding and boosting financial wellness benefits as a win-win. Nearly 60 percent of employers are “very likely” to and another third are “moderately likely” to focus on the financial well-being of workers beyond retirement decisions, according to Aon’s 2017 Hot Topics in Retirement and Financial Well-being report. While the subject has been on the radar for several years, more than half of employers say the importance has increased in the last two years.

Here are some fields where adding financial well-being programs can be particularly effective:

  1. Healthcare. These professionals may be struggling with large amounts of debt while juggling nontraditional hours. In some cases, student loan bills can equal or top a mortgage.
  2. Nonprofits. This sector has a bottom line focused on change, so employees may be paid less, grapple with modest resources and be asked to juggle tasks beyond their job description. Meanwhile, many nonprofits constantly seek new and additional funding, which can make the future unstable.
  3. Startups. Building a startup is hot, but keeping them running can be stressful. What’s more, employees may need to figure out stock options and, in some cases, how to properly manage a sudden windfall.
  4. Retail. These workers largely deal with wages lower than $10 an hour and sporadic schedules. With average rental rates nationwide topping $1,200 a month, paying the rent requires significant work.
  5. Manufacturing. This sector’s employers may be stressed about looming automation and the increased need for college degrees. Factories also continue to close nationwide, creating additional concerns.

Dawn Wotapka is a financial writer.

What is Financial Toxicity?

What is Financial Toxicity?

In the Best Money Moves Roundup, we run down the latest news on student loan and retirement assistance, the benefits of biking and artificial intelligence in the workplace.

If you ever wondered if there was a direct link between financial stress and health outcomes, look no further. According to research compiled by Managed Care, Americans are skipping medications that could improve their quality of life because they can’t afford them.  The term financial toxicity was coined by Amy Abernathy, MD, in an essay for the journal Oncology.  “Out-of-pocket expenses related to treatment,” she wrote, “ are akin to physical toxicity, in that costs can diminish quality of life and impede delivery of the highest-quality care.”

The truth is many employees need help navigating healthcare benefits to lower out of pocket expenses and avoid , “financial toxicity.”

What can you do about it?

What We’re Reading

Employer tackles student loan debt and retirement. When employees contribute 2% of their salary to paying down student loans Abbott Laboratories will pay the equivalent of 5% of an employee’s salary to to their 401(k). Learn more about their Freedom 2 Save program.

Happier, healthier employees. An initiative in France incentivising employees to bike to work led to a 15 percent reduction in sick leave, lower transportation expenses, less stress and higher job satisfaction. See how it worked.

Would you trust orders from a robot? More than 90 percent of workers responding to a recent study would, but progress is slow when it comes to companies adopting and preparing for artificial intelligence in the workplace. Read the full results breakdown.

Open offices lower direct communication. Recent studies found that email and instant messaging conversations increase significantly, productivity declined, and face-to-face interaction decreased when offices transitioned to an open landscape. Why this happens and how it relates to insect behavior.

Help Millennials secure their financial wellness. Nearly 70 percent of millennials are stressed about their finances. Help them get on track and back to work. Share this quick tipsheet with your employees.

A simple gesture to support employee’s mental health. With recent rises in mental illness and suicide employers cannot avoid addressing mental illness any longer. A memo like this is a good start.

On-demand health insurance. A new startup offers employees a core set of health care benefits and the option to add coverage for specific procedures. Is this the future of insurance benefits administration?

Have something to add? Email info@bestmoneymoves.com.

A Lack of Healthcare Benefits is Causing Financial Toxicity

A Lack of Healthcare Benefits is Causing Financial Toxicity

A lack of healthcare benefits is causing financial toxicity for employees across the country.

If you ever wondered if there was a direct link between financial stress and health outcomes, look no further. According to research compiled by Managed Care, Americans are skipping medications that could improve their quality of life because they can’t afford them.  The term financial toxicity was coined by Amy Abernathy, MD, in an essay for the journal Oncology.  “Out-of-pocket expenses related to treatment,” she wrote, “ are akin to physical toxicity, in that costs can diminish quality of life and impede delivery of the highest-quality care.”

The truth is many employees need help navigating healthcare benefits to lower out of pocket expenses and avoid , “financial toxicity.”

A recent study by Willis Tower Watson found that those with high levels of financial stress were twice as likely to have poor health as opposed to those without financial stress. And the longer employees go without treating illnesses the more business is affected by lost productivity and absenteeism.

Adams Dudley, MD, a pulmonologist, and Director of the Center for Healthcare Value at the University of California-San Francisco is concerned about the prescription crisis we’re facing and said that, “This problem definitely impacts the lives of patients. They’re skipping medicines or skipping other things to buy medicines.”

As a prescriber, Dudley finds difficulty distinguishing what patient pays how much for the same drug because insurance coverage varies greatly, “These days price is such a weird thing. If I give one patient Spiriva [a bronchodilator], the cost could be $10. For another patient, it may be $200 a month. And I don’t get good information about which patient is which.”

Michael A. Evans, Vice President of Enterprise Pharmacy and Chief Pharmacy Officer of Pennsylvania’s Geisinger Health System shares a spreadsheet with prescribers of available medications for a patient’s condition along with the average wholesale price (AWP) of each medication to help prescribers lower patient costs. Evans said that for prescribers, “It’s been quite eye-opening for them, helping them better understand the cost burden on the patient in front of them, and it has definitely affected their prescribing habits. We get responses like, ‘Wow! I had no idea medication A I gave was so expensive. I could certainly use medication B.’”

Evan’s cost transparency sheet offers a solution to the problem Dudley describes, but a drawback is that the AWP is the cost of the drug to the health plan and the patient combined. This makes so it difficult to determine the patient’s actual expense.

Dudley points to another pertinent issue in healthcare, the discrepancy between the cost to make a medicine and the price it sells for. He says, “To many people, $160 is a lot of money. But almost anyone would rather spend it taking the family to dinner than paying for a medicine that cost three dollars to make.”

Employers can help address out-of-pocket costs for prescriptions by being knowledgeable about insurance benefits they offer, updating employees on any changes and asking for feedback to see if the current program is meeting their coverage needs.