Currently, the United States holds the title for the world’s highest national debt, ringing in the first quarter of 2023 with $30.1 trillion.
Broken down further, the average American household debt runs upwards of $100,000 (including credit cards, personal loans, student debt, and mortgages), while the overall average personal debt is greater than $21,000. This means that despite the fact your employees have a good job, they likely still owe a lot of money and can be having a hard time paying their bills or paying off the debt they have accrued.
When you ponder the psychological ramifications of this type of ongoing, ever-looming payments placed on your workers, it doesn’t make for a contented or productive mindset.
This despondency can have a ripple effect, causing issues at work and derailing your best and brightest minds as workers are becoming too stressed about their financial future to put in their best at the office.
How Do You Promote the Financial Well-Being of Your Employees?
There are many things you, as an employer, can do to assist your employees in climbing out of financial holes.
As employees reassess what qualities they desire in the companies they agree to work for, you can set yourself apart from the competition by showing you’re concerned about the plight of your employees’ financial well-being and are prepared to take proactive steps to rectify or ameliorate the situation.
Caring about something so important to them will reinforce loyalty in a way nothing else can, but what steps can you take to do so?
1. Offer Substantial Employee Benefits Along with a Decent Salary
What does your current employee benefits package look like? What are you offering that makes you stand out from the rest of employers and shows you truly care about the health and well-being of your workforce?
Taking the time to develop a package that meets the modern needs of your employees is one of the most important and easiest things you can do to help them.
2. Provide Financial Tools to Help Your Employees
Giving employees handouts like budgeting worksheets, individualized financial counseling, and running financial literacy courses or gifting them money management apps are some inexpensive ways to help bolster the overall financial happiness of your employees.
3. Initiate Learning Opportunities and Professional Development
Does your company provide opportunities or stipends to cover the cost of continuing education? Most US employers do offer some form of educational benefits, but sadly the use of them can often be quite low.
Continuing education for employees can often be a complicated process that makes it difficult for this benefit to be taken advantage of.
Tuition assistance or reimbursement is the most common offering, along with in-house training.
Continuing education and educational conference offerings are the next most common, followed by personal development courses and licensing courses/exams.
What are you currently offering, and how often is it used by your employees?
Only about 4 to 5% of US companies offer any student loan repayment assistance, but this is something currently desired by over 80% of workers, so now might be a great time to revisit and restructure this part of your employee benefits package.
4. Cover the 5 Basic Components of Financial Health
Most financial experts can agree that the key to financial health resides in just 5 main components. If you can guide your employees through these concepts, they will be well on their way to improved financial literacy and stability:
Being able to set aside money from each paycheck is essential to the health of anyone’s finances.
There are things like high-yield savings accounts, savings bonds, corporate bonds, and money market accounts that can help your employees improve their future financial outlook.
The average American spends around $2,000 a year on coffee. This proves that every purchase counts.
When you add that to the amounts borrowed for cars, houses, and education…there’s a reason the US has the highest national debt in the world.
What Instilling Financial Confidence in Your Employees Means to Your Bottom Line
Once your workforce has come to terms with their current financial situation and you have assisted them in taking proactive steps to improve it, their financial confidence levels should rise. Thorough comprehension of how to save, spend, invest, and manage any current debt will increase their confidence and well-being, not to mention attract and keep the high-caliber employees you want. The development of wise money management skills can solidify your employees’ futures and their future with your company.
You, as their employer, have the power to offer your workers the tools they need to enhance their financial situations well beyond the weekly or biweekly paycheck they earn.
While giving out a solid financial benefits package might be more expensive at the get-go, you can make up for that by lowering the cost spent on employee turnover and recruiting.